Ann Francis Ikin & Ors. v Shawbrook Bank Limited & Ors

Costs may be disallowed, and a solicitor may be ordered to pay the opposing party’s assessment costs, where bills contain claims for work unsupported by the file or reasonable inference and create a misleading impression about estimated time. Such conduct may be both unreasonable and improper under Civil Procedure Rules 1998, rule 44.11. A solicitor remains responsible for work subcontracted to a costs draftsman. Signing a bill is a substantive certification, not an empty formality. Any sanction must be proportionate to the misconduct. Where the receiving party’s conduct materially causes the assessment proceedings, the solicitor, rather than the client, may be ordered to pay an appropriate proportion of the paying party’s costs on the indemnity basis.

The claimants had obtained damages and rescission of finance agreements concerning solar-panel installations and were entitled to recover their litigation costs. Their solicitors, Parkerwall, instructed costs lawyers to prepare eight bills. The bills contained numerous identical entries, largely estimated time, descriptions unsupported by the files, and work which had not been carried out. The bills were certified as accurate, although the supervising solicitor had not checked them line by line.

One bill was assessed at 32.97 per cent of the amount claimed and another at 31.07 per cent. Six further bills were settled at substantially reduced figures. The defendants applied for sanctions under rule 44.11 and for an order that the solicitors pay the costs of the detailed assessment proceedings.

1. Orders. The court disallowed 40 per cent of the claimants’ costs otherwise allowed or agreed. The claimants’ solicitors were ordered to pay 75 per cent of the defendants’ detailed-assessment costs, summarily assessed on the indemnity basis, under rule 44.11(2)(b) of the Civil Procedure Rules 1998.
2. Unreasonable and improper conduct. Claiming work for which there was no evidence in the file and no reasonable basis for inference was both unreasonable and improper. The conduct permitted no reasonable explanation and bore the hallmark of conduct regarded by professional consensus as improper. The failure to identify that virtually all claimed time had been estimated, together with unsupported or misdescribed entries, made the bills intentionally misleading.
3. Responsibility and certification. Parkerwall remained responsible for the conduct of the costs lawyers whom it had instructed to perform work for which Parkerwall was retained. A solicitor’s signature on a bill certifies its accuracy and compliance with the indemnity principle. It is not an empty formality. The supervising solicitor acted unreasonably and improperly in certifying bills which contained unsupported entries and claimed costs which the clients were not liable to pay.
4. Sanction and proportionality. The court applied the principles in Gempride Ltd v Bamrah, including the requirement that the applicant establish unreasonable or improper conduct, the court’s residual discretion, and proportionality. A 40 per cent reduction of the total costs allowed or agreed in the eight cases, amounting to £23,136.44, was proportionate.
5. Assessment costs. The usual order under rule 47.20(1) was displaced because the solicitors’ conduct required investigation, lengthened the hearings, and substantially reduced the bills. The appropriate order was for 75 per cent of the defendants’ costs, payable by the solicitors under rule 44.11(2)(b). The costs were properly assessed on the indemnity basis because the conduct took the cases out of the norm.