Lime Technology Limited v Liverpool City Council

Summary assessment of costs is ordinarily appropriate, but it may be unsuitable where the costs claimed involve unusual hourly rates, complex and specialist litigation, and issues that may make the court’s assessment effectively binding for later stages of linked proceedings. In such circumstances, costs should be assessed by a costs judge on the standard basis. The court may nevertheless order a payment on account where the receiving party is entitled to costs and the amount proposed by the paying party is inadequate.

The claimant had succeeded on an application for a confidentiality ring order. A specific disclosure application had been resolved without requiring determination. The defendant accepted liability for the costs of both applications on the standard basis but disputed the amounts claimed.

The claimant sought substantial sums, including approximately £140,000 in solicitors’ profit costs and counsel’s fees. The defendant contended that the solicitors’ costs were excessive and proposed total costs of £40,000. The issues were whether the costs should be summarily assessed and whether a payment on account should be ordered.

1. The claimant was entitled to the costs of both applications on the standard basis. The court accepted that the proceedings were high-value, specialist and heavily contested, and that the claimant’s solicitors had substantial expertise in complex procurement disputes.
2. Although summary assessment is the norm, it was inappropriate in this case. The hourly rates claimed were unusual and substantially above the guideline figures. The court found it difficult to determine fair rates on the material available.
3. Any rates adopted might effectively bind the parties for the remainder of the two linked actions, creating potential unfairness. In addition, the specific disclosure application had been resolved without detailed submissions on costs.
4. The two sets of costs were therefore ordered to be assessed by a costs judge on the standard basis rather than summarily assessed.
5. A payment on account was appropriate. The defendant’s proposed figure of £40,000 was inadequate, and the court ordered payment of £100,000 in total, provisionally apportioned as £40,000 to the confidentiality ring application and £60,000 to the specific disclosure application.