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You are here: BAILII >> Databases >> England and Wales High Court (Senior Courts Costs Office) Decisions >> Zakirov v Newmans Solicitors [2012] EWHC 90222 (Costs) (26 September 2012) URL: https://www.bailii.org/ew/cases/EWHC/Costs/2012/90222.html Cite as: [2012] EWHC 90222 (Costs) |
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SENIOR COURTS COSTS OFFICE
London, EC4A 1DQ |
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B e f o r e :
____________________
ILDAR ZAKIROV |
Claimant |
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- and - |
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NEWMANS SOLICITORS |
Defendant |
____________________
Mr Roger Mallalieu Counsel (instructed by Newmans) for the Defendant
Hearing date: 23 July 2012
____________________
Crown Copyright ©
Master Leonard, Costs Judge:
Introduction
The Basis of Assessment: the Claimant's Submissions
'… Where one is dealing with the losing party's conduct, the minimum nature of that conduct required to engage the court's discretion would seem, except in very rare cases, to be a significant level of unreasonableness or otherwise inappropriate conduct in its widest sense in relation to that party's pre-litigation dealings with the winning party or in relation to the commencement or conduct of the litigation itself.'
The Basis of Assessment: the Defendant's Submissions
The Basis of Assessment: Conclusions
Whether the Defendant is a Litigant in Person: the Claimant's Submissions
a. At common law, a solicitor who acts for himself could usually recover his professional fees as costs. There was an implied exception to the indemnity principle to facilitate this: London & Scottish Benefit Society v Chorley (1884) 13 QBD 872 (CA).
b. Under the former Rules of the Supreme Court, this principle was expressly preserved. RSC Order 62 r18(6) stated: 'For the purposes of this rule a litigant in person does not include a litigant who is a practising solicitor.' Hence practising solicitors were not to be treated as litigants in person, and so were exempt from the special regime for the costs of litigants in person which was introduced by the Litigants in Person (Costs & Expenses) Act 1975.
c. Under the Civil Procedure Rules, this exception was abolished. CPR 48.6(6) provides that, 'For the purposes of this rule, a litigant in person includes… (b) a… solicitor… who is acting for himself.'
d. This provision is purportedly glossed by paragraph 52.5 of the Costs Practice Direction ('CPD'), which provides; 'Attention is drawn to rule 48.6(6)(b). A solicitor who, instead of acting for himself, is represented in the proceedings by his firm or by himself in his firm name, is not, for the purpose of the Civil Procedure Rules, a litigant in person.'
e. In Malkinson v Trim [2003] 1 WLR 463 (CA), it was held that the effect of CPR 48.6(6) and CPD 52.5, in conjunction, was that where a solicitor acts in the name of his firm rather than in a personal capacity, then the rule in London Scottish Benefit Society v Chorley continues to apply.
'The provisions… appear in practice directions, and not in the rules themselves. This seems to have influenced the judge… He referred to passages in the judgments of this court in In re C (Legal Aid: Preparation of Bill of Costs) [2001] 1 FLR 602 and Godwin v Swindon Borough Council [2002] 1 WLR 997. In the former, Hale LJ said [2001] 1 FLR 602 , 608–609, para 21:
"Unlike the Lord Chancellor's orders under his 'Henry VIII' powers, the CPR 1998 themselves and the 1991 Remuneration Regulations, the practice directions are not made by Statutory Instrument. They are not laid before Parliament or subject to either the negative or positive resolution procedures in Parliament. They go through no democratic process at all, although if approved by the Lord Chancellor he will bear ministerial responsibility for them to Parliament. But there is a difference in principle between delegated legislation which may be scrutinised by Parliament and ministerial executive action. There is no ministerial responsibility for practice directions made for the Supreme Court by the Heads of Division. As Professor Jolowicz says [2000] CLJ 53 , 61, 'It is right that the court should retain its power to regulate its own procedure within the limits set by statutory rules, and to fill in gaps left by those rules; it is wrong that it should have power actually to legislate.'"
In the latter, May LJ said [2002] 1 WLR 997, 1001, paragraph 11:
"Practice directions are not the responsibility of the Civil Procedure Rule Committee, whose responsibility under section 2 of the Civil Procedure Act 1997 is limited to making civil procedure rules. Practice directions are subordinate to the rules: see paragraph 6 of Schedule 1 to the 1997 Act. They are, in my view, at best a weak aid to the interpretation of the rules themselves."
It is true that the ground rules which set out the relevant criteria… are contained in the rules, not the practice directions. But the rules are, to some extent, open-textured…In our judgment, the provisions in the practice direction…are made pursuant to the power in the court to regulate its own procedure within the limits set by the statutory rules and to fill in gaps left by those rules…(The aspect of the CPD challenged in that case, which related to costs estimates)…does not purport to, nor does it, introduce criteria for the assessment of costs which are inconsistent with, or additional to, those contained in CPR 44.5 itself.'
'It is sufficient for present purposes to say that a practice direction has no legislative force. Practice directions provide invaluable guidance to matters of practice in the civil courts, but in so far as they contain statements of the law which are wrong they carry no authority at all.'
Whether the Defendant is a Litigant in Person: the Defendant's Submissions
'As I have sought to point out earlier in this judgment, the basis of the principle that a solicitor who acts for himself in litigation is entitled to compensation, by way of costs, for his time and trouble is a recognition that he (in common with any other litigant) ought to be indemnified against the expense to which (on the hypothesis that he has been successful in the litigation) he has been unjustly put. The special position of a solicitor is that he does not need to employ others to provide professional skill and knowledge in the conduct of litigation. He can provide that skill and knowledge himself. Further, there is no difficulty in measuring what it costs him to do so; and there is a potential saving in costs if he is not discouraged from doing so. One effect of CPR r 48.6(6)(b), read in conjunction with section 52.5 of the Practice Direction, is that there is now more clearly recognised a distinction between the solicitor litigant who provides, in connection with his own litigation, professional skill and knowledge in the course of his practice as a solicitor-that is to say, who "is represented … by himself in his firm name"—and the solicitor litigant who provides skill and knowledge in what might be described as "his own time"—that is to say, outside the course of his practice as a solicitor and (typically) outside the office. The latter is treated as a litigant in person for the purposes of CPR r 48.6, and so is subject to the restrictions imposed by that rule, including the two-thirds restriction imposed by paragraph (2). The former is not. Nor is there any reason, consistent with the need to provide an indemnity, why he should be. Further, there is no reason, consistent with the need to provide an indemnity, why he should not recover the cost of providing professional skill and knowledge through employees of his practice'.
Whether the Defendant is a Litigant in Person: Conclusions
Hourly Rates
Conclusion on hourly rates
'The basis of the rule about solicitors being able to recover for their own time was considered by the Court of Appeal in Malkinson v. Trim…Chadwick LJ…said this:
"As I have sought to point out earlier in this judgment, the basis of the principle that a solicitor who acts for himself in litigation is entitled to compensation, by way of costs, for his time and trouble is a recognition that he (in common with any other litigant) ought to be indemnified against the expense to which (on the hypothesis that he has been successful in the litigation) he has been unjustly put. The special position of a solicitor is that he does not need to employ others to provide professional skill and knowledge himself. Further, there is no difficulty in measuring what it costs him to do so; and there is a potential saving in costs if he is not discouraged from doing so."
This passage forms part of the reasoning behind the decision of the Court of Appeal in Malkinson v. Trim and I regard myself as bound by it. The solicitor is to be compensated for his professional time on the basis that it is valuable to him and its use causes him expense by its loss. It is not therefore enough for the solicitor merely to establish that he or she was in practice during the relevant period. The solicitor must show that he could have charged for the time which he expended on his personal litigation. This does not, in my judgment, mean that the solicitor in that position will have to prove that for all of the time expended on the litigation he could otherwise have been engaged on other clients' business, nor will it be necessary for the Court to examine in detail how successful or otherwise the solicitor's practice was at the relevant time. The rule is, for purely practical reasons, more broad-brush than that. The Court will assume that it was possible for the solicitor to have hired out his services to clients during the relevant period.'