Madhu Kapoor (Deceased) v Harchand Johal & Ors

On a detailed assessment, the court may disallow all costs under CPR Part 44.11 where a party or legal representative has acted unreasonably or improperly in connection with the assessment. The jurisdiction is disciplinary rather than compensatory. Dishonesty need not be proved, but mere negligence, mistake or error of judgment is insufficient. The sanction must be proportionate to the misconduct.

A receiving party cannot recover more than it is liable to pay its own legal representatives. Signed certificates on bills ordinarily support compliance with that indemnity principle, but a materially inaccurate certificate may constitute a serious disciplinary matter. Multiple defects which individually might not justify a sanction may cumulatively warrant complete disallowance.

The judgment concerned the detailed assessment of Mr Baltaj Johal’s bill of costs, served against the estate and personal representatives of Madhu Kapoor in two sets of long-running neighbour-dispute proceedings. The bill claimed £258,583.78 including VAT.

The paying party challenged the bill’s failure to separate work done before and after 1 April 2013, inclusion of work from matters not covered by the notices commencing assessment, inclusion of costs overturned on appeal or already summarily assessed, and substantial discrepancies between the bill, interim statute invoices and earlier statements of costs. The central issues were whether the defects engaged CPR Part 44.11 and whether the bill complied with the indemnity principle.

1. Outcome. The bill was assessed at nil. The paying party was awarded the costs of the detailed assessment on the indemnity basis, assessed as drawn at £10,314.
2. The failure to divide the bill so as to distinguish work before and after 1 April 2013, the inclusion of costs for matters not covered by the notices commencing assessment, and the failure to remove costs overturned on appeal were inappropriate. Taken individually, those errors would not necessarily justify a CPR Part 44.11 sanction. Taken cumulatively, they warranted intervention because they imposed substantial demands on scarce court resources and were not corrected despite ample notice.
3. Under CPR Part 44.11, the court may disallow all or part of the costs being assessed, or order the party or legal representative at fault to pay costs caused to another party, where there has been non-compliance with a rule, practice direction or order, or unreasonable or improper conduct. The jurisdiction marks the court’s disapproval and is not compensatory. Dishonesty is unnecessary; mere negligence, mistake or error of judgment is insufficient. The burden rests on the applicant, and any sanction must be proportionate.
4. The indemnity principle limited recovery to sums for which the receiving party was liable to its own legal representatives. The court treated the invoices as interim statute bills. The bill’s substantially higher figures, different hourly rates, VAT not charged in the invoices, and later-added attendance notes were inconsistent with that principle and with the signed certificates of accuracy.
5. The court found serious misconduct across the bill and supporting files, including claims for attendances which did not occur and later additions or amendments to attendance records. A further VAT concern was recorded for the attention of the SRA and, if appropriate, HMRC, but was not relied upon in reaching the orders.

Not stated in the judgment.