Allan Grubb -v- Lance Mason Limited : refund of £591.25 following restriction of base costs to the fixed costs recovered from the opposing party
We are pleased to be able to report on the outcome of this case, which was dealt with on the papers in the High Court in Sheffield on 30th October 2018
Mr.Grubb instructed the Defendant firm to represent him in a claim for personal injuries and associated losses arising out of a road traffic accident on 24th August 2016.
The claim was funded by way of a conditional fee agreement dated 27th March 2017 which provided for a success fee of 100% of basic charges, capped at 25% of damages.
The claim progressed through the MOJ Portal and a medical report was obtained however due to the Defendant's position and arguments in regards to liability proceedings were issued.
Damages were agreed in the sum of £2365.00 and after deductions in respect of the solicitors' success fee the Claimant received £1389.35 in settlement of his claim on 24th November 2017.
Lance Mason delivered a statute bill setting out base costs at £6,401 (34.6 hours at £185).
On an assessment on the papers on 30th October 2018, those base costs were limited to £1,633.00, that being the amount of base costs recovered from the opposing party.
The Court accepted that it was bound by s.74(3) Solicitors Act, which provides :
s.74 (3) The amount which may be allowed on the assessment of any costs or bill of costs in respect of any item relating to proceedings in the county court shall not, except in so far as rules of court may otherwise provide, exceed the amount which could have been allowed in respect of that item as between party and party in those proceedings, having regard to the nature of the proceedings and the amount of the claim and of any counterclaim.
The Claimant relied on the words of Hughes, J at para 19 of Lynch -v- Paul Davidson Taylor  EWHC 89 (QB) :
I am satisfied that s 74(3) exists to apply a cap where there are limits under the rules to the level of costs recoverable as between the parties. The subsection remains in the same form as it had in 1974. At that time, costs in the County Court were in most cases recovered on one or other of five scales, according to the amount of money in dispute. For each scale, the County Court Rules provided either a maximum charge, or a bracket of maximum and minimum fees, item by item from writing a letter to briefing Counsel. That may well explain the references to items in s 74(3). The section was designed to limit the costs between solicitor and client to those scales, in the same way as the scales limited the costs recoverable as between parties. There were exceptions to the limits imposed by the scales, but the statutory scheme was nevertheless to create a framework of such limits. Under the new Civil Procedure Rules, the express reference to s 74(3) which appears in r 48.8 (1A), shows that the section does not simply survive but is intended still to bite. And bite it does wherever there are fixed costs. There are fixed trial costs in all fast track cases which reach trial, provided for by Pt 46. There are fixed costs in small claims track cases, provided for by Pt 27 with Pt 45. In each case there are very limited exceptions to the fixed costs provided for, one of which is where there has been unreasonable behaviour by a litigant. But those exceptions do not mean that it is not possible to say in a fast track or small claims track case what is the amount that "could have been allowed" as between the parties, and in such cases the solicitor is limited to that sum as against his own client unless there exists the kind of written agreement provided for by r 48.8(1A). There are other proceedings where fixed costs apply, provided for by Pt 45. Whether or not there will, as time goes by, come to be more circumstances where costs are fixed, remains to be seen, but if this does occur, then s 74(3) will no doubt apply in those cases also.
By way of footnote the Court indicated that, if the base costs recoverable from the client had not been restricted by virtue of s.74(3) the claim for 34.6 hours would have been reduced to 20 hours.