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England and Wales High Court (Senior Courts Costs Office) Decisions


You are here: BAILII >> Databases >> England and Wales High Court (Senior Courts Costs Office) Decisions >> Evans v Acuity Law Ltd [2025] EWHC 1661 (SCCO) (20 June 2025)
URL: https://www.bailii.org/ew/cases/EWHC/Costs/2025/1661.html
Cite as: [2025] EWHC 1661 (SCCO)

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Neutral Citation Number: [2025] EWHC 1661 (SCCO)
Case No: SC-2024-BTP-000811

IN THE HIGH COURT OF JUSTICE
SENIOR COURTS COSTS OFFICE

Thomas More Building, Royal Courts of Justice
Strand, London, WC2A 2LL
20/06/2025

B e f o r e :

COSTS JUDGE NAGALINGAM
____________________

Between:
Mr Paul Evans
Claimant

- and –


Acuity Law Limited
Defendant

____________________

Mark Carlisle (instructed by Checkmylegalfees.com) for the Claimant
Dean O'Connor (instructed by Acuity Law Limited) for the Defendant

Hearing dates: 05/03/2025

____________________

HTML VERSION OF JUDGMENT APPROVED
____________________

Crown Copyright ©

    This judgment was handed down remotely at 4.30pm on 1 July 2025 by circulation to the parties or their representatives by e-mail and by release to the National Archives.

    Costs Judge Nagalingam:

  1. This judgment concerns what has amounted to a preliminary issues hearing in a solicitor/client assessment. The sums in issue are not substantial but the issues raised are clearly very important to the parties.
  2. Mr Carlisle's submissions

    Disclosure

  3. Regarding the disclosure bundle, Mr Carlisle submits there have been vast amounts of duplication due to whole chains of e-mails being included. He suggests that if the e-mail chains were removed then the bundle would likely run to no more than 500 pages. It appears he is likely correct.
  4. Mr Carlisle considered that disclosure must have therefore taken place in a different manner to that which the court had anticipated.
  5. Mr Carlisle also drew my attention to the fact that the 'html' format originally disclosed (as opposed to the version produced for this hearing) bore the same e-mail address as the date of disclosure (rather than the dates on which each of those e-mails were originally sent). This placed restrictions on the level of detail the points of dispute could descend into, as compared to the detail Mr Carlisle can address as of today with the benefit of the uncorrupted bundle.
  6. Mr Carlisle explained that is the reason why a line by line assessment approach has not been adopted in the points of dispute, and if the court considers a line by line assessment to be necessary in this matter, then directions will be sought for an adjournment and the drafting of supplemental points of dispute.
  7. He invited me to note that the request for a detailed assessment hearing was made by the Defendant and that the mere listing of this hearing cannot be taken as an indication of that the Claimant was "ready to go" as it were.
  8. Points of Dispute

  9. Mr Carlisle observed there are 3 distinct matters upon which the Defendant was instructed, charged over 6 invoices.
  10. I am content to adopt Mr Carlisle's suggested format of naming these matters 1, 2 and 3.
  11. Matter 1 has been resolved between the parties. Matter 1 is covered by parts 1 and 2 of the breakdown of costs. The replies raise comment as to the impact on the costs of assessment and those comments may be revisited when the time comes to consider the costs of assessment.
  12. Matter 2 (parts 3 and 4 of the breakdown of costs) concerns a family dispute largely centred on ownership of a motorbike and a watch (invoices 37409 and 38937).
  13. Matter 3 (parts 5 and 6 of the breakdown of costs) is the largest part of the breakdown and concerns the costs of a costs dispute in which the Defendant represented the Claimant (invoices 38058 and 38939).
  14. In focusing on matters 2 and 3, Mr Carlisle observed there are four distinct areas of challenge but not all of which apply to both unresolved matters. He explained that the points of dispute set out points of principle and arguments regarding the role of costs estimates which apply to matters 2 and 3. There are additional arguments concerning matter 3 only, being unusual costs (CPR 46.9) and termination without reasonable notice.
  15. Estimates

  16. Mr Carlisle confirmed there was no dispute that estimates were given, nor their amount.
  17. With regards to the Claimant's reliance on Newman v Dadds LLP [2020] EWHC B23 (Costs), Mr Carlisle submits that may be taken as a yardstick but nothing more. He considers Newman demonstrates the circumstances in which an estimate may be deemed limited in scope where the solicitors' charges went well beyond what was contemplated by the estimate because the case had moved on substantially from what was originally anticipated.
  18. Mr Carlisle submits that Newman is therefore distinguishable from the facts of the index matter, and in any event is not binding upon me.
  19. Mr Carlisle accepts that the Claimant presents no evidence of reliance on the estimates provided in the index dispute, but relies on St. James v Wilkin Chapman LLP [2024] EWHC 1716 (KB) at paragraph 79 which he submits demonstrates reliance on estimates, i.e. that estimates must be of 'some' use and the absence of a witness statement from the Claimant saying they relied on the estimate would add nothing. However, Mr Carlisle does not consider that point is being taken against the Claimant in any event.
  20. Regarding arguments as to informed consent, Mr Carlisle relies on Herbert v HH Law Ltd [2019] EWCA Civ 527 and in particular paragraph 38 of the same regarding the test/approach to dispute whether informed consent given.
  21. Matter 2

  22. With reference to page 99 of the bundle, the terms of business for 'Matter 2' concern the "Sale of vintage motorbike", recording a commencement date of 2 September 2022. Mr Carlisle expressed that there could be no doubt regarding what the estimate was and what it covered. However, he submits the estimate is not only a yardstick, but extremely useful as a measure against which the costs then incurred can be compared.
  23. Mr Carlisle invited focus on the "Key Terms", and the fact that 'cost' is one of the key terms.
  24. He submits the scope of the work is very clear, and accepts it does not include the actual issuing of injunction proceedings.
  25. Mr Carlisle observed that the Defendant argues the Claimant knew what work was being done but submits that the Claimant had a modest case against his family for which a clear estimate was provided, and that the Defendant went well beyond the estimate but only told the Claimant as such well after the event.
  26. Mr Carlisle invited me to consider an e-mail dated 20 September 2022 in which the Defendant confirms that the estimate excluded counsel's fees, and summarised that "all told £3,600 plus VAT and £700 plus VAT which I understand is acceptable.." and that they (the Defendant) "..will provide a revised estimate if we don't get a positive response to the letter of claim".
  27. Mr Carlisle submits the Claimant reasonably relied on that estimate unless advised otherwise. He also submits that the Claimant was never told about irrecoverability of his own costs. He was only told about the recoverability of opposition costs, i.e. the costs risk to him.
  28. Mr Carlisle highlighted that in the event, no application for an injunction was ever drafted or made, which would have been the secondary stage of the Claimant's instructions to the Defendant, and that in reality, Matter 2 never progressed beyond the "Initial Stage" as defined in the terms of business for Matter 2.
  29. The "Secondary Stage" was to engage counsel to advise on the merits of pursuing an application for an injunction and making such an application if necessary, and it is this stage that Mr Carlisle says was never engaged.
  30. Matter 3

  31. In addition to reliance on the estimate for Matter 3, Mr Carlisle set out that the Claimant's primary position is costs should be reduced to nil due to termination without reasonable notice. The Claimant's secondary position is reductions to nil because all costs are CPR 46.9(3)(c) "unusual".
  32. With reference to page 1,164 of the bundle, the terms of business for 'Matter 3' concern the "Dispute with (1) Gareth Morgan (2) Cristina Morgan and (3) Belvoir Lettings t/a Hillary Davies Ltd", recording a commencement date of 23 September 2022.
  33. Mr Carlisle describes the scope of the Matter 3 instructions as "fairly limited", and ultimately covered the period of 11 August 2022 to 12 January 2023.
  34. Notwithstanding the scope of the terms of business for Matter 3, Mr Carlisle observed that the anticipated submissions were never made, no oral review took place in this period, and the Defendant never attended a hearing on the Claimant's behalf.
  35. With reference to the orders made in the Matter 3 dispute, Mr Carlisle drew my attention to an order dated 1 September 2022 which was restricted in scope, allowing the receiving party (in Matter 3) 14 days to file evidence/submissions demonstrating compliance with consumer protection regulations.
  36. The context of this was an objection which raised arguments regarding cancellation of contracts which, if successful, may have led to disallowance of the cost liability the Claimant was otherwise facing.
  37. The Morgans engaged costs counsel Kevin Latham who prepared written submissions which, in Mr Carlisle's word, demonstrated the objection raised regarding consumer regulations was a "duff point" and that should have been clear to the Defendant when advising the Claimant.
  38. For context, Mr Carlisle also highlighted an e-mail from the Claimant to the Defendant dated 4 October 2022 which he says demonstrates the Claimant was querying the strength of the consumer regulations point. However, I must say it is not clear to me that's what the Claimant was doing. In fact, the candour of communication seems more to be querying the eligibility for a paying party to make such an argument. For the avoidance of doubt, he was.
  39. In any event, the point Mr Carlisle was striving to make was that the Defendant, as professional solicitors, ought to have concluded the consumer regulations point had no merit and should not have been pursued beyond a simple compliance enquiry followed by acceptance of the response.
  40. Mr Carlisle then observed that on 7 October 2022 the Defendant simply proceeded to engage the Claimant regarding which counsel should be instructed for the provisional assessment. There was no advice from the Defendant or the Defendant took no view at all.
  41. Mr Carlisle was critical of the absence of advice against using a KC to advise on an oral review of a provisional assessment because even if the Claimant had won, the costs associated with instructing a KC would likely not have been recoverable. That was a factual omission which amounts to costs which were unusual under CPR 46.9(3)(c).
  42. In a further e-mail on 7 October 2022, Mr Carlisle observed a further failure to comment on the risk of failing to recover the costs of engaging a KC even if the Claimant won the hearing.
  43. Next Mr Carlisle invited me to consider an attendance note dated 4 October 2022 in which the instruction of a KC was discussed. He submits this note demonstrates the Defendant "washed their hands" regarding the engagement of a KC and failed to comment on the recoverability risk.
  44. Returning to the theme of the consumer regulations point being 'weak', Mr Carlisle invited me to consider an e-mail from Nicholas Isaac KC to the Claimant, dated 18 October 2022 and later forwarded to the Defendant, concluding with Nicholas Isaac KC saying "I am sorry, but in the light of the authorities I do not see a way of arguing your point in a cogent or rational way at all."
  45. Mr Carlisle acknowledged that Mr Isaac KC was engaged and paid directly by the Claimant, but wished to stress that the Defendant still had the benefit of Mr Isaac KC's advice. He says it is the solicitor's job to give strategic and firm advice and that the Defendant failed to do that.
  46. Citing an attendance note dated 18 October 2022, Mr Carlisle submits this demonstrates a further lost opportunity to advise the Claimant regarding what amounted to unusual costs, whilst also neglecting to make it clear what inter partes costs the Claimant was already liable for (by that stage).
  47. Mr Carlisle then referred me to e-mails dated 21 and 23 October 2022 which amount to the production of instructions to Robert Marven KC, prepared by the Claimant, and incorporated into formal instructions sent out by the Defendant.
  48. Mr Carlisle observed that Mr Marven KC gave the same advice as Mr Isaac KC, and that should not have been of any surprise to the Defendant.
  49. An additional point regarding the instruction of Mr Marven KC was the exclusion from the bill of his fee of £1,100 for the 26 October 2022 conference. Mr Carlisle submits that fee should be in the bill and should be treated as a solicitors disbursement which is therefore capable of being disallowed and reimbursed (if I were to conclude the engagement of Mr Marven KC was unreasonable / unusual (46.9(3))).
  50. Mr Carlisle invited me to consider the Defendant's letter to Shoosmiths, solicitors for the Morgans, dated 26 October 2022 in which the consumer regulations point was conceded but an intention to pursue an oral review of the provisional assessment was stated /maintained.
  51. However, he submits that the Defendant failed to advise the Claimant regarding the '20% rule' with respect to the threshold reduction necessary to recover the costs of the oral review and that this was fundamental because once the consumer regulations point had been conceded, the provisional assessment was not winnable, i.e. the bill could not be reduced by 20% or more.
  52. Mr Carlisle cited the fact that despite a comprehensive set of points of dispute, a bill of around £67,000 was provisionally assessed down to around £61,000 (on an indemnity basis assessment) and in circumstances where the receiving party had made a Part 36 offer of £47,000.
  53. Mr Carlisle thereby sought to highlight that the receiving party had already beaten their own Part 36 offer by a wide margin following provisional assessment. This meant that the Claimant therefore had a huge hurdle to overcome in that not only were they competing against the 20% rule, but they would also need to get the assessed costs down from around £61,000 to below £47,000 in an oral review - before the same judge who had conducted the provisional assessment and provided detailed written explanations.
  54. Mr Carlisle submits it ought to have been obvious this was an "unwinnable" oral review and the Claimant should have been advised as such. In those circumstances, to permit the oral review process to progress amounted to the incurring of unusual costs which Mr Carlisle invites this court to deem irrecoverable.
  55. Mr Carlisle relies on CPR 46.9(3)(c) and submits that to have incurred costs in relation to a hopeless oral review and a failure to inform the Claimant the associated costs might not be recovered from the other party mean all such cost were unreasonably incurred. He submits that the Claimant had no opportunity to give informed consent for such unusual costs to be incurred.
  56. Mr Carlisle then referred me to an exchange of emails between the parties on 7 November 2022 where he says the Claimant was seeking advice and refers to the costs benefit of the challenge to the Morgans' costs. He submits that no issue is taken by the Defendant essentially adopting a position of "sitting on the fence", but that the failure was to adequately explain to the Claimant that the costs of proceeding to the oral review were capable of being 'unusual' because the oral review was bound to fail (in terms of achieving a reduction of 20%+).
  57. Mr Carlisle thereafter drew my attention to the Defendant's successful efforts to have the 17 November 2022 oral review hearing adjourned – on the basis that they had never received the relevant hearing notice and were not ready for the same. Despite this, Mr Carlisle also observed that draft instructions to leading counsel had been produced (on 14 November 2022) seeking advice regarding the strength of the pleaded points of dispute, whether the bills to be reviewed erroneously included claims for work outside of the scope of the relevant costs orders, and the prospects of achieving a reduction of 20% or more.
  58. The oral review was relisted to 12 January 2023 but the Claimant asked the Defendant to seek a further adjournment, not because his preferred leading counsel was unavailable, but because Mr Evans himself could not attend on that date.
  59. Mr Carlisle draws attention to the above chain of communications to demonstrate that the Defendant was alive to the pending oral review, and the potential risks to the Claimant. He submits that the Defendant's e-mail to the Claimant timed at 19:40 on 4 January 2023 is the first and only time the Defendant refers to the recoverable costs position in any way, because they realised the Claimant would need to achieve a reduction in assessed costs to a level below the Part 36 offer, by which time the vast majority of the fees they are now seeking had already been incurred.
  60. In this regard, Mr Carlisle submits the Defendant belatedly realised what advice they should have given the Claimant, just far too late.
  61. However, he says this still fails to explain the absence of any advice as to the unusual nature of engaging leading counsel for an oral review of a provisional assessment where the bill had already been reduced to approximately £61,000, and where it ought to have been made clear such costs (i.e. using a KC) would not be recoverable inter partes even if the Claimant had won the oral review.
  62. Mr Carlisle explained that an application to adjourn the relisted oral review was filed around 8 January 2023. However, it is an e-mail from the Defendant to the Claimant dated 10 January 2023, i.e. 2 days before hearing, which Mr Carlisle says provided sage advice for the first time.
  63. That e-mail is too lengthy to quote from but in summary expressed concern as to the cost benefits of pursuing the oral review. The e-mail also summarised the comments of leading counsel and acknowledged the Claimant's dissatisfaction and disagreement with aspects of the advice he had received.
  64. The e-mail also advised in relation to the court's refusal to hear the Claimant's application to adjourn on the papers, reflected the Claimant's expressed dissatisfaction with his previously instructed solicitors and leading counsel, and explained the potential for the Defendant to come off the record if the Claimant insisted upon certain conduct (as detailed in the 10 January 2023 correspondence).
  65. The e-mail closed with various requests for outstanding payments and Mr Carlisle submits that it was the demand for payment which led to the fallout between the parties. The Defendant removed itself from the court record and the Claimant had to deal with the oral review unrepresented.
  66. Mr Carlisle accepts that the Defendant did what the Claimant asked of them, and accepts that some clients take a greater lead than others. However he submits that the role of a solicitor in respect of all clients is to give frank, robust and honest advice. It is also to explain the costs consequences of any particular step; in this case pressing the arguments advanced in the oral review of a provisional assessment.
  67. Mr Carlisle avers that what the Defendant told the Claimant on 10 January 2023 is what the Defendant should have told the Claimant at the outset. He submits there is no evidence the Claimant gave informed consent, and the there is a rebuttable presumption that the costs are unreasonable – for which the burden falls on the Defendant to demonstrate evidence in seeking a rebuttal.
  68. If the court is not with the Claimant on their primary and secondary positions, then Mr Carlisle seeks reductions by reference to costs estimates which he submits had been wholly exceeded.
  69. Termination

  70. Mr Carlisle submits that termination of a retainer two or less days before a hearing is not reasonable. He says that the Claimant was effectively "thrown to the lions" at the 12 January 2023 hearing.
  71. He cited Gill v Heer Manak Solicitors [2018] EWHC 2881 (QB) and principles of a "binding deal", in particular paragraphs 13, 19 and 22:
  72. "13. A solicitor's retainer to conduct litigation is an example of what, although known as an "entire contract" , is better described as involving an "entire obligation": see Vlamaki v Sookias and Sookias [2015] EWHC 3334 (QB); [2015] 6 Costs LO 827 at paragraph 10. The "entire obligation" is, in effect, a condition precedent which must be satisfied before remuneration can be claimed: a solicitor can generally only claim remuneration when all work has been completed, or when there is a natural break. That, however, is subject to a common law exception and to any agreement to the contrary."
    "19. In Underwood, Son & Piper v Lewis [1894] 2 QB 306 the Court of Appeal discussed the circumstances in which a solicitor may be entitled to terminate a retainer. Lord Esher MR noted that there may be cases in which a solicitor was entitled to say that the retainer must come to an end. He added:
    But it has been held that in such a case a solicitor cannot throw his client over at the last moment which might be ruin to the client, and, even though the solicitor may have good cause for declining to act further for the client, he must give him reasonable notice of his intention to do so."
    "22. It is not disputed by the firm that the same principles apply to the termination provision in the retainer. It is essential that such notice as is given is "reasonable". If the notice is not "reasonable" then the firm cannot point to any applicable provision departing from the general principle that remuneration can only be claimed when all work has been completed, or when there is a natural break. In the absence of reasonable notice, the firm would accordingly be unable to claim for the costs which were sought before the master."
  73. In the index matter, Mr Carlisle maintained that two days was "plainly unreasonable notice" and as a consequence the Defendant failed to fulfil its entire obligation. Instead, the Defendant was demanding payment two days before a hearing at which the Claimant would be otherwise unrepresented.
  74. Mr O'Connor's submissions

  75. Mr O'Connor accepted criticism of the bundle and apologised that it was lengthier than it needed to be.
  76. Mr O'Connor submits that the Claimant, Mr Evans, was a client who knew his mind and in fact obtained his own, independent advice from a KC.
  77. Matter 2

  78. Citing the "Terms of Business 'Key Terms'" document, Mr O'Connor submits the Defendant had to undertake work outside of scope because of the Claimant's instructions. He observe that that the "Scope of work" section set out:
  79. "In the first instance we have been instructed to write to Ms Rhian Evans and Mrs Patricia Evans seeking their undertakings to not sell the vintage motorcycle which you claim the ownership of which should have been transferred to you upon completion of the rebuild (the "Initial Stage").

    On the basis we have not received undertakings from Mr Rhian Evans and/or Mrs Patricia Evans, we will engage counsel to advise on the merits of pursuing an application for an injunction and making such an application if necessary ("Secondary Stage")"

  80. Thus within scope was the vintage motorbike and an ownership dispute with the Claimant's father. However, outside of scope was a dispute concerning a Rolex watch, and the involvement of other family members.
  81. This extended to whether the watch was a gift or not, data protection arguments concerning a video showing the Claimant gifting the watch to his father, and placing a charge over the Claimant's father's property.
  82. Mr O'Connor submits these are all instructions the Claimant provided which fell outside of the scope of work the Defendant had anticipated.
  83. I observed that when speaking of costs, the Defendant used the language of "cost" – "in the region of" and "likely to amount..". Mr O'Connor said "estimates are simply estimates". He submits they are not a cap and if the billed amount is "within touching distance" of the estimate then the Claimant's argument falls away.
  84. Mr O'Connor also wished to draw attention to the estimate being expressly exclusive of VAT and disbursements, which needs to be factored in when comparing estimate and bill. He submits the billed amount is "not that far away" from the initial estimate in any event.
  85. Mr O'Connor stressed that the scope of work did not include the costs of pursuing an application for an injunction, but rather reflected engaging counsel to advise on the merits of such an application.
  86. Citing attendance notes of calls between 2 and 6 September 2022, Mr O'Connor submits these demonstrably show this was a family dispute, and that fair warnings were given early on.
  87. I have considered these attendance notes and observed the Defendant encouraged the Claimant to treat the sale of the motorbike and ownership dispute concerning the watch as a family dispute, i.e. something to be resolved through discussion rather than involving lawyers. I can also see the Defendant raised the issue of opposition costs if he obtained an injunction which was later lifted on the basis it should never have been granted.
  88. A note dated 5/6 September 2022 records "It is obviously a risk Paul will have to consider whether he wants to take that risk, but there would obviously be a significant amount of potential costs hanging on matters."
  89. Mr O'Connor cited an internal e-mail dated 2 September 2022 which detailed the Claimant's initial approach and advice provided as to costs, in particular that "these issues (particularly as they are quasi-family) are invariably better resolved without involving solicitors and issues of proportionality. However Paul is willing to pay for us to write to his father/sister demanding that they stop the sale of the [vintage motorbike] which has huge sentimental value, reserving the rights to take further steps to prevent sale".
  90. Mr O'Connor then cited an e-mail to the Claimant dated 6 September 2022, noting the warning given therein:
  91. "As discussed if you apply for an injunction you will have to give a cross-undertaking in damages and therefore it is important for you to have as good a feel as possible as to the strength of a claim before embarking on proceedings, even if that advice is negative. There is I think a risk that counsel will say that any case like this where there is limited documentary evidence (and factoring presumptions) that matters will turn on oral evidence in which case the matter carries considerable risks."

  92. On 9 September 2022, Mr O'Connor sought to demonstrate how the Defendant had recommended a choice of junior counsel and wrote to the Claimant stating:
  93. "Several counsel have indicated ability to advise on the claim re Motorbike and Rolex. Costs estimate varies from c£1,000 plus VAT to £2,000 plus VAT depending on level of experience.
    Ultimately it is your call as to how much you are prepared to incur to obtain the advice- I would suggest a keen junior is probably best in a case of this nature."
  94. In terms of the Claimant's knowledge of the work being done on his behalf, Mr O'Connor cited an e-mail from the Claimant in which he had made proposed working amendments to a letter to be sent to his father concerning the dispute over ownership of the vintage motorbike and Rolex watch.
  95. Mr O'Connor then referred me to an exchange of e-mails between the parties on 20 September 2022 in which the Defendant stated:
  96. "Given that Ro has now also prepared a detailed letter of claim I need to update you on costs. Work in progress currently amounts to over £5k. However to avoid any duplication between myself and Ro (such as attendance at the conference or reviewing the instructions/letter of claim) I would propose to cap this for the work to date at £3,600. However it is vital in my view to keep a close eye on costs going forward. I will raise an interim invoice shortly, once I have John Churchill's fee note.
    I appreciate you're an experienced litigator. However even though the sums in issue in this dispute are relatively modest the costs of pursuing your father through to trial is going to be significant (probably outweighing the value of the Bike and Watch). We've discussed the usual rules on costs (the winning party being entitled to recover their costs from the losing party) but that assumes the losing party is good for the costs order."
  97. Further correspondence of the same date sets out:
  98. "Good to speak just now as per our call in terms of fees they were excluding counsel, who has now come back at £700 plus VAT. So all told £3,600 plus VAT and £700 plus VAT which I understand is acceptable, but will provide a revised estimate if we don't get a positive response to the letter of claim."
  99. Mr O'Connor submits this starkly demonstrates that the Claimant had no issue with the Defendant's fees. If he did, why not say anything until a year later?
  100. On 3 October 2022, Mr O'Connor submits a lengthy e-mail from the Claimant demonstrates that the Rolex watch dispute was becoming more important to the Claimant than the vintage motorbike. This e-mail focuses on whether the Claimant's parents were yet formally legally represented, and raised data protection concerns regarding an alleged video said to show the Claimant had gifted, rather than loaned, the disputed Rolex watch.
  101. On 6 October 2022, and in response to a draft letter prepared by the Defendant, the Claimant commented "The issue of breach of Data Protection is not covered. Are we waiting to receive the recording first before we then say we will sue for damages in breach thereof?" to which the Defendant replied "Suggest we avoid raising any issues at present we just want disclosure. We don't want to jeopardise them providing it to us by raising a satellite issue at this stage."
  102. Mr O'Connor submits the Defendant simply followed the Claimant's instructions whilst managing expectations as best they could. He considered that the video of the Rolex watch apparently being gifted seemed to cool the Claimant's enthusiasm to pursue recovery of the Rolex watch.
  103. He also invited consideration of the Defendant's offer to reduce their fees (as outlined above), that the billed amount is "within touching distance" of the estimate, and that all work done was consented to by the Claimant through his conduct.
  104. Matter 3

  105. With regards to the oral review matter, Mr O'Connor accepts the reference to 23 September 2022 as commencement of instructions and that the scope of work as set out in the key terms:
  106. "In the first instance we have been instructed to file and serve a Notice of acting in respect of the claim (claim no. F0QZ24W7) and assist in dealing with submissions pursuant to the Order of 1 September 2022 (the "Initial Stage"). Against D3 we are awaiting a date for an oral hearing to challenge the Provisional Assessment. Against D1 and D2 you also intend to challenge the Provisional Assessment at an oral hearing."
  107. As to any reference to the Defendant's e-mail of 26 October 2022 including the line "Am also obliged to forward Key Terms which I attach.", Mr O'Connor submits that ultimately the "scope" description is accurate, whether sent to the Claimant on 23 September or 26 October 2022. He further submits that the scope of the retainer outlined the path of work to be done.
  108. As to the relevant arguments ahead of an oral review, Mr O'Connor submits that the consumer protection point had no significant impact on/at conference. Rather, the assessment review was progressed on the Claimant's insistence that the court would surely further reduce the costs generally.
  109. For the sake of clarity, Mr O'Connor submits that any communications in which "in the region of" was referenced should be read to exclude VAT and disbursements. He also referenced the terminology of "costs beyond the initial stage", and pointed out that "Initial Stage" was defined in scope.
  110. Mr O'Connor then addressed the Claimant's use of leading counsel, referring to an e-mail exchange on 6 October 2022 in which the Defendant recalled the Claimant had advised they had engaged two leading counsel for advice, and asking which leading counsel he wished be instructed to prepare response submissions. At the same time, the Defendant recommended more junior counsel and stated "Ultimately it depends on the budget and the cost benefit savings you think you could make by getting home on these submissions. You were also going to re-send some documents to me."
  111. The Claimant responded by confirming he had been advised by Nicholas Bacon QC but that he was not available for the rest of October.
  112. Mr O'Connor then referred me to various e-mails between the parties spanning 29 September to 7 October 2022 which demonstrate direct contact between the Claimant and clerk to leading counsel, as well feeding back that information to the Defendant in seeking to have instructions sent to the Claimant's preferred counsel.
  113. I observe that the Claimant's desire to involve leading counsel very much seems to be based on the Claimant having drawn their own conclusions as to the relative strength of the consumer regulations point.
  114. Mr O'Connor referred me to e-mail correspondence dated 24 October 2022 in which the Defendant deferred to the Claimant to check that a fee quoted for leading counsel by the chambers clerk was consistent with what the Claimant had previously discussed with chambers. Having obtained the Claimant's confirmation, a further e-mail of the same date was highlighted to demonstrate chambers had been told to deal directly with the Claimant regarding payment of leading counsel's fees.
  115. Mr O'Connor took issue with the notion that the Defendant wasn't alive to the Claimant exposure to costs, citing a 25 October 2022 e-mail in which the Defendant set out "However obviously your objective should be to extricate yourself from the ongoing costs proceedings for as little exposure as possible for you." He submits this demonstrates the Defendant's awareness of costs and provision of advice to the Claimant to try and keep costs down.
  116. As to the Claimant's instructions for the oral review, Mr O'Connor took me to e-mails in the period 28-30 October 2022 in which queries were raised if all of the points were being maintained to which the Claimant responded "yes challenge everything possible please". In response, the Claimant was advised "I don't think we can challenge everything", pointing out that the notice of cancellation point had been conceded.
  117. Mr O'Connor submits the Claimant had been repeatedly warned of the risk of not achieving sufficient reductions on oral review, which he says left the Defendant walking a tightrope between following instructions and acting in the Claimant's best interests.
  118. He invites me to consider the Matter 3 fees in the context of a Claimant who had gone to leading counsel of his own volition and was therefore very much driving the litigation.
  119. The Defendant's absence of knowledge of the listing of the oral review as at 7 November 2022 is reflected by an e-mail to the Claimant of the same date which stated "I understand we are simply awaiting for the listing for the hearing challenging Provisional Assessment."
  120. The same e-mail goes on to state:
  121. "In terms of instructing Robert Malvern (sic) KC, that is an option, though the cost benefit of the same is difficult to gauge. Certainly the advice you seem to have obtained re suitable offers from costs lawyers were poles apart from the eventual determination on paper. I am not sure whether you have made any further proposals to those I have seen the costs lawyer suggest from October-December 2021."
  122. In response, and seemingly not grasping that leading counsel was going to be more expensive than junior counsel arguing the same point, the Claimant responded with "The only advice I have on the costs is from the costs lawyer. Our goal surely is to get the costs down to at least the cost lawyers points of dispute?" and "The costs benefit as it stands is plainly clear is it not?".
  123. Mr O'Connor submits this, along with other communications already referenced, highlights that ultimately the Claimant did not accept any suggestions to avoid using leading counsel for Matter 3, and the Defendant had no power to tell the Claimant he couldn't instruct leading counsel.
  124. Mr O'Connor also submits that the Claimant would ignore advice he didn't like, and generally had courage in his convictions when insisting on courses of action the Defendant didn't necessarily agree with. He provided examples.
  125. A note of calls on and 5 and 6 December 2022 recorded:
  126. "I also reiterated to Paul in the call that whereas he was convinced that there was a significant amount of cost claimed within the Bill of Costs which weren't recoverable under the Cost Order that the Cost Orders themselves appeared fairly broad.
    In particular paragraph 2.1 of the Amended Order of June is actually quite broad in that it allows all the costs associated with the claims that are not being pursued and it would seem to me to be quite easy for them to try and hang their hat on matters having some link to claims not being pursued, so if they had to incur whatever costs as a result of the fact that claims weren't being pursued any longer then they could potentially recover the same."
  127. Mr O'Connor then took me to draft instructions to leading counsel, prepared in mid-December 2022, in which concerns about the adequacy of the points of dispute (prepared before the Defendant's engagement) with regards to scope of costs orders and claims for costs from the Claimant which potentially fell outside of the scope of the costs orders against the Claimant. These were followed by chasing correspondence to the Claimant seeking his approval of the instructions (in the context of the Claimant's keen prior interest and involvement with the inter partes costs arguments).
  128. Mr O'Connor referenced a lengthy call on the Claimant dated 3 January 2023. The note of the same records:
  129. "I repeated the advice I had previously provided to him in general about the position that he found himself in, it being unenviable and difficult when challenging on provisional assessment and there are huge risks involved, in the context of the offers previously made, costs involved pursuing the hearing, and the significant hurdle to overcome (in terms of reduction) to make the challenge worthwhile.
    Despite the advice that I have given he is resolved that pursuing oral hearings are necessary in that he is not prepared to compromise. I did say that he had to still consider the cost benefit analysis of matters. He reverted to discuss the advice previously given about Kain Knight about the various offers. I said I was not proposing at this stage to comment on those. Paul had clearly not beaten the Part 36 offers made by our opponents and those made by us fell way short of the mark.
    However just because advice had been made where to pitch offers did not necessarily mean that that advice was negligent, but we had to deal with here and now."
  130. This was followed by two lengthy e-mails of the same date to the Claimant, the first of which set out:
  131. "Separately and as you are aware you are of course tasked with beating the paper order on assessment by over 20% otherwise are faced with meeting the costs of the hearing. You are aware that although I was not involved in the substantive dispute and initial advice in relation to the assessment of costs I am gravely concerned, notwithstanding the valid points you appear to make concerning the amount of the costs and advice on offers made by your previous representatives Kain Knight and comments made by Nick Isaac KC that you will struggle to beat that at the oral hearing. That is particularly so in circumstances where there are indemnity costs orders in play. I do understand the point you make about the costs' orders being restricted to the five items listed in the Order of August 2021. However, my view is that those are broader than you consider. There is also the prospect of the costs assessment in relation to D3 though the basis of assessing the costs D3 were ordered is different (being the standard basis) and therefore there is likely more scope for challenging those costs.

    That is important when considering the cost benefit, given that you would be incurring a brief fee of £10k plus VAT instructing Robert Malvern (sic) KC to attend the hearing- we would need this on account."

  132. Later on the same date, a further e-mail to the Claimant set out:
  133. "I have tried to call because I was concerned following our call that you are under some confusion about my point about the 'cost benefit' and the costs which flow from the review hearing.
    First and foremost, I apologise if you have been somewhat confused by my explanation and my references to cost benefit in the context of Provisional Assessment and the reference to the minimum requirement to beat the costs order by 20%.
    I also appreciate and understand your frustration with the process- and have told me on several occasions that you have no intention to pay the Morgans the sum ordered and hoped Robert Malvern KC would be able to chip away at the claim significantly (£30k-£40k)- you know I consider that to be optimistic based upon the information that I have to date, particularly as there are indemnity costs orders in place which are more difficult to challenge (albeit your position is that not all of the costs are covered by those indemnity orders). I am also conscious of your dissatisfaction with the advice provided by Nick Isaac KC (you mentioned pursuing him as you consider to be in a worse position as a result of his advice in particular) and Kain Knight. I understand your frustrations with the previous advice, but you must try and consider the 'hear and now'.
    I will try and be clear as I can to avoid any ambiguity on the costs which flow from the review process -
    The cost of any case which does not go beyond paper Provisional Assessment is restricted to £1,500 plus VAT (excluding bill drafting). A Part 36 offer such as the one made by our opponent would not trump that (i.e., the costs of the paper determination on Provisional Assessment)- although of course that does not mean that the other consequences of Part 36 does not apply even on a Provisional Assessment i.e., the additional rate of interest and the uplift of 10% of the assessed costs. In this case they made a Part 36 offer of £47k which has been comfortably beaten on Provisional Assessment.
    The costs of the review process is governed by CPR47.15(10) which as you are aware provides that a party which has requested an oral hearing will pay the costs of and incidental to that hearing unless you achieve an adjustment in your favour of 20% or the court orders otherwise i.e., you must beat any review by at least 20% otherwise you would in any event be ordered to pay the costs of the review process i.e., your costs and their costs (which combined will amount to c£30k (you will know from their previous statement of costs amounted to £12k, I anticipate it would have increased somewhat since)), Robert's brief fee alone and written submissions (though arguments can be made about that itself) would amount to c£15k as well as our costs).
    To be clear the drafting does not automatically entitle the party that requested the recover their costs i.e., to be clear even if you succeeded in chipping 20% off the bill you would not necessarily recover your costs of doing so (hence the reference to the cost benefit). The court will also consider previous offers made when determining costs of the review process (including the Part 36 offer) – They will say that even if you chip the bill by 20% but not lower than their offer i.e, to say £53k they have still beaten that offer and therefore you should meet the costs (as they will say you could and should have accepted that offer- I appreciate that I understand the advice you had from Kain Knight was that you would beat the offer but the fact is they did). That is why realistically to make it worth your while I suggested you would need to chip away below the Part 36 offer. At that point I think you could reasonably say you have achieved a significant reduction which ought to entitle you to the costs of review hearing (but there is of course no certainty)
    It is also why I have always been concerned about the cost benefit of throwing further monies at the review process (and why I have mentioned I was concerned to avoid a situation where you were digging a 'deeper hole' for yourself), in the context of the previous offers made and that the costs of running a review will in any event be significant. I hope this clarifies matters and is why frankly I invariably advise clients to consider commercial resolutions."
  134. Mr O'Connor submits the Defendant did all they could to protect a Claimant who couldn't accept when he was defeated.
  135. Termination

  136. The Defendant had been trying for some time to convince the Claimant to stand down and the chronology of events up to termination is relevant, including the fact work had been done which the Claimant was then refusing to pay for. Mr O'Connor submits that alone was a reason to terminate, especially when the Defendant was otherwise being required to incur even more costs.
  137. Mr O'Connor submits that the Claimant had enough time to find new representation or could have competently represented himself. The Claimant had options.
  138. As to the reasonableness of retainer termination and amount of notice provided, Mr O'Connor referred me to various communications between the parties.
  139. A note of attendance on 4 and 5 January 2023 is instructive, stating:
  140. "HR engaged on several telephone calls with Paul and conversations to discuss the present position. I reiterated my cost benefit concerns about the position that Paul was adopting and in particular the very significant risk in my view in firm likelihood that he would end up in a worse financial position by virtue of persisting with the challenge.
    This is because he has got to beat the offer by 20% and a part 36 offer to make it worthwhile, which is not an insignificant reduction in the current Bill of Costs. We went back and forth on this saying that the key to costs were not included in the indemnity cost order. I explained I understood the point Paul was trying to get across, but I disagreed with his view on the breadth of the Order (it is wider than he considers) and also our opponent will say that the only sums included within the bills are sums they were allowed to claim under the cost order, ie. they don't go outside of the bandwidth of the cost order."
  141. Mr O'Connor also relies on e-mails around 10 and 11 January 2023 which demonstrate the Claimant had engaged Kain Knight to replace the Defendant, and dealt with the administrative elements of that transfer including transfer of monies to Kain Knight.
  142. An e-mail on 10 January 2023 to the Claimant sought to stress that counsel could not be instructed absent sufficient monies on account to cover counsel's fee but that "I have just received a call from Guildhall indicating they had their colleague had just spoken to someone to indicate that you wish to proceed with Oliver Moore. As this call follows our conversation whereby, I indicated that we would not be able to instruct Oliver(or Robert) in circumstances where we would not be in possession of monies on account, and in circumstances where Oliver does not accept instructions via direct access, I therefore assume Kain Knight have given the go ahead to instructing him via themselves.".
  143. Mr O'Connor submits the context of the Defendant's desire to come off the record is therefore important. The Claimant was being represented by Kain Knight, and counsel was ready and waiting to attend the hearing (subject to securities as to payment).
  144. One of the lengthier e-mails of 11 January 2023 demonstrates the Defendant, whilst trying to come off the record, was still providing assistance such as ensuring that counsel for the oral review (who was by this stage being instructed via Kain Knight, who had recommended counsel Oliver Moore) and if nothing else had ensured the Claimant had advocacy representation at the oral review hearing (subject to counsel being reassured as to payment).
  145. Mr Carlisle

  146. In brief response, Mr Carlisle reiterated that the first request for payment came 2 days before termination for non-payment, and that I have not been taken to any earlier requests such that I could consider the 10 January 2023 as something of a final request prior to termination.
  147. Decision

    Disclosure

  148. The electronic disclosure of papers arose from agreed terms between the parties. Those terms did not specify precisely how the disclosure should be arranged but the Defendant sensibly accepts the Claimant's criticism, whilst rejecting any assertion that documents are missing.
  149. Whilst it had been my intention to conclude this assessment on the papers based on the costs pleadings produced to date, I cannot see how that exercise can be conducted at this stage.
  150. It seems to me that the Claimant has highlighted that the manner in which electronic disclosure has taken place is such that the Claimant could either only raise the points they have done at this stage, or incur a likely disproportionate amount of time de-duplicating the electronic file in order to then ascertain the extent to which the electronic file supports the work claimed. The alternative, it seems to me, would have been to rely on points of dispute that may ultimately have proved to be entirely inadequate.
  151. It is also relevant, it seems to me, that the disclosure which took place (in contrast to the bundles produced for this hearing) suffered some sort of corruption such that original dates on outgoing communications during the relevant period were replaced with the date of disclosure.
  152. I consider it relevant that it was the Defendant who requested this assessment hearing because it is clear that the Claimant was not yet in a position to prepare their line by line objections.
  153. I also accept that to some degree, the Claimant has made arguments which in some instances, if successful, would lead to certain of the costs either being effectively capped or otherwise struck out / reduced to nil.
  154. For the reasons set out below, I have not concluded certain parts of the bill should be subject to such measures.
  155. However, the outcome of those decisions is that the issue of disclosure must be revisited, and directions provided for supplemental points of dispute and supplemental points of reply (if so advised).
  156. Estimates

    Matter 2

  157. With regards to "Matter 2" estimates, I do not propose to repeat the scope of the work (already set out above).
  158. The points of dispute suggest that £3,150 (excluding VAT and disbursements) represents the "worst case estimate" and that in any event the Defendant should be restricted to £900 (excluding VAT and disbursements) based on the initial estimate provided.
  159. If I am against the Claimant in this regard, they argue the burden is on the Defendant to prove informed consent as to the costs incurred in order to avoid a finding that costs in excess of the estimates are "unusual".
  160. The Matter 2 retainer is very clear in terms of scope, and estimates of costs for the two stages identified. However, the Claimant has ignored the section of the retainer that provides "further work will be charged at our usual hourly rates (please see below), unless agreed with you separately."
  161. Stage one of the Matter 2 retainer was clearly engaged. Stage two of the same retainer was substantially engaged, albeit falling short of the filing of an injunction application. In that regard, I consider a substantial element of the total (up to) £3,150 estimate for profit costs was incurred in terms of the work the Claimant required the Defendant to do.
  162. The issue of the Rolex watch was not the subject of a formal separate retainer but reasonably falls under the description of "further work" and there is no suggestion the Claimant thought the Defendant was undertaking such work for free.
  163. The Rolex watch was clearly of great importance to the Claimant, so much so he was willing to jeopardise family relationships and challenge any notion the watch had been a gift, rather than the loan the Claimant contended for.
  164. In all the circumstances, I cannot conclude that the work be reasonably limited to £900 plus VAT as if the estimate operated as a cap. It was clearly an estimate and there is no evidence the Claimant ever treated it as a cap. Further, I cannot conclude that none of the stage 2 work was incurred. Clearly an injunction was explored and meaningfully so. Thirdly, I consider the Claimant was clear in his instructions concerning the Rolex watch and cannot reasonably maintain an argument he was not aware time was being incurred in relation to the same.
  165. Taking all of those factors into account, I cannot conclude that a raised charge of £5,600 plus VAT is unusual in nature or amount such that it meets the test for costs that were unreasonably incurred. Further, and in so far that it may assist the parties, I have reviewed the filed bundles and consider that the costs in parts 3 and 4 of the bill were incurred with the express or implied approval of the client.
  166. However, it remains open for the Claimant to raise arguments as to whether those costs were reasonable in amount.
  167. Matter 3

  168. With regards to "Matter 3" estimates, I again do not propose to repeat the scope of the work (already set out above).
  169. There is no doubt the estimate for Matter 3 refers to profit costs of up to £3,000 plus VAT but this is clearly marked as relating to the "Initial Stage", which was to file a Notice of Acting and "assist in dealing with submissions pursuant to the Order of 1 September 2022."
  170. There was a clear understanding that the reference to "submissions" was in seeking to challenge the outcome of a provisional inter partes assessment in which the Claimant considered the reductions were too modest and wanted a more robust challenge to be pursued.
  171. As with Matter 2, the "Cost" section of the retainer proceeded to explain that "Our costs for any further work will be charged at our usual hourly rates (please see below), unless agreed with you separately."
  172. The oral review hearing was listed, subsequently adjourned and relisted. I am in no doubt the Defendant was required by the Claimant to undertake "further work" and I have seen plenty of evidence, in the form of e-mails and telephone attendance notes on the Claimant, which demonstrate the provision of informed consent.
  173. The communications I have been taken to and seen demonstrate that the Claimant was given fair warning that leading counsel was not necessary or even reasonably required for the types of costs arguments being advanced, and sufficiently warned of the costs risk – with several instances where the cost benefit was discussed and the Claimant was encouraged to use junior counsel at much lower rates.
  174. Leading counsel was instructed with the express approval of the Claimant, with the fee notified and agreed, and against the Defendant's advice. I also consider the associated time to have been reasonably incurred. Further, given the Claimant knew the retainer provision for "further work" and the rates to be charged, the profit costs associated both with engaging leading counsel and pursuing "Matter 3" to an oral review hearing were time costs incurred with the Claimant's implied approval. They are therefore reasonably incurred costs. However, it remains open for the Claimant to raise arguments as to whether costs were reasonable in amount.
  175. As to recovery, counsel's fees of £2,000 plus VAT in advising is not so outwith the norm for suitable costs counsel that the fee itself could be considered unusual in nature or amount. Further, the time costs associated with counsel would have been incurred regardless of the seniority of counsel engaged.
  176. As to what might not be recovered from the other party, I consider the Defendant provided fair warning and explanation concerning how the 'winner' of an oral review hearing is decided, and that there was insufficient points to be raised to yield the necessary levels of reductions both in relation to the '20% rule' and Part 36 offer.
  177. Unusual costs (CPR 46.9)

  178. I do not consider the Claimant has made out a sufficient argument for me to conclude that the Matter 3 costs in parts 5 and 6 of the bill were sufficiently unusual in nature to lead to a conclusion that such costs were unreasonably incurred.
  179. I repeat my comments above as to scope and I do not think consider the retainer to be as restrictive as the Claimant would have me believe.
  180. I also conclude that the Claimant was heavily involved, kept well informed and consistently provided both explicit and implied consent for the steps taken on his behalf.
  181. A great deal of time has been spent regarding the instruction of leading counsel but the circumstances of the instruction in this case is something of a grey area. That is to say it was never the Defendant driving the instruction of leading counsel, but rather the Claimant insisting upon the same.
  182. There may well have been an argument for the Claimant had this been a case of the Defendant recommending leading counsel but absent any warnings as to the unusual nature of engaging leading counsel to attend the oral review of a provisional assessment.
  183. Instead, the Defendant has demonstrated various examples of where junior counsel was recommended, and the Claimant was discouraged from persisting with the instruction of leading counsel. Despite this, the Claimant was insistent in using leading counsel.
  184. That was his prerogative but ultimately the fees for leading counsel in the Defendant's bill for an advice in conference is relatively modest and not significantly more than junior counsel would have charged for a similar conference.
  185. I accept the expressed brief fee of circa £10,000 for the hearing must be unusual in amount but no such fee appears in the bill. Further, regardless the level of counsel engaged, the work associated with their instruction would still have been incurred.
  186. The only circumstances in which the costs associated with continuing to challenge the provisional assessment would have been avoided is if the Defendant refused to follow the Claimant's instructions.
  187. I do not consider the Claimant has made out a case that costs in parts 5 and 6 have been unreasonably incurred in all the circumstances. Further, the provisions concerning non-recovery of costs are relevant to where the Claimant was successful. The Claimant was not successful in either achieving a 20%+ reduction or beating the Part 36 offer of his opponent.
  188. As above, the Claimant may still pursue reductions on the grounds of reasonableness but the points of dispute to date do not otherwise convince me to restrict what costs the Defendant is entitled to pursue from the Claimant.
  189. For the sake of completeness, I have elected to not address the exclusion from the bill of Mr Marven KC's fee of £1,100 for the 26 October 2022 conference. Now that the Defendant is on notice of such an argument, I consider it a point to be explored between the parties and otherwise raised on notice should the assessment come back before me. In terms of guidance only, the Claimant should take stock of whether their argument concerns Mr Marven's status and what the comparative cost of junior counsel might have been.
  190. Termination

  191. Whilst expanded upon in oral submissions, the pleaded point of dispute concerning termination is very brief.
  192. The Claimant has not pointed to any clause in the retainer which precludes the Defendant from raising a bill following termination but in any event I do not consider the Claimant was "thrown to the lions" as suggested by Mr Carlisle.
  193. Payment of bills, discharging payments on account, or making payments to discharge disbursements are all common features of retainers and non-payment is also a common clause leading to termination in the form of ceasing to act.
  194. Perhaps most persuasive of all though is that at the time of the 12 January 2023 relisted oral review, the Claimant had demonstrably been in contact with Kain Knight and was already in the process of instructing / re-instructing them. The Claimant had also been engaging counsel directly and but for counsel not accepting direct access engagements, the Claimant would not have even needed the Defendant to confirm the instruction of counsel.
  195. NEXT STEPS

  196. In the first instance I direct the parties to liaise and agree relevant dates but my directions are that the Defendant resubmits their electronic disclosure in a format which de-duplicates e-mails and ensures that the original document dates are preserved.
  197. Thereafter, directions shall provide for supplementary points of dispute and points of reply (if so advised), and thereafter provision for either party to request a further hearing before me.
  198. A directions order consequent upon this part-heard assessment will follow.


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