Allen -v- Brethertons LLP : An important decision on the ability to recover costs incurred by fee earners who are not Costs Lawyers
This decision, handed down today by Master Leonard in the Senior Courts Costs Office, followed on from the Defendant's unsuccessful attempt to resist an application made under s.68 Solicitors Act 1974 for delivery of a statute bill (a statute bill being necessary in order to start the process of disputing legal fees), which was reported here : Allen v Brethertons LLP  EWHC B15 (Costs) (02 October 2018).
That first judgment received wide publicity, not only because of the substantive decision, but also due to Master Leonard's footnote, in which he expressed some criticism of the Defendant solicitors for corresponding direct with the Claimant, notwithstanding that Costs Lawyer Kerry-Anne Moore of checkmylegalfees.com (who has a right to conduct litigation in respect of costs under the Legal Services Act 2007) was on record as acting in the proceedings.
Whether the Defendant has complied with the Code of Conduct is not a matter for me, but I would offer the view that Ms Moore, when acting as a Costs Lawyer with a right to conduct litigation, is at the least entitled to expect from the Defendant the same professional courtesy as a solicitor would expect. It does not seem to me that she has received it.Master Leonard in first judgment, Allen -v- Brethertons  EWHC B15 (Costs)
The Defendant's attempt to avoid the full consequences of its tactical approach did not stop there however. Although the Defendant acknowledged that it should be responsible for the costs of the application, it submitted that to the extent that work had been undertaken by non-costs lawyers, there was no entitlement in principle to recovery of costs.
In this case, in addition to the work undertaken by Miss.Moore, work had been undertaken by –
- Mr.Carlisle (a costs draftsman of 32 years' experience and co-director, along with Miss.Moore, of checkmylegalfees.com) who undertook some advocacy, played a "broad advisory role" and engaged in correspondence with the Defendant
- Ms.O'Gorman (a costs draftsman of 7 years' experience), who prepared a draft bill of costs
- Mr.Bedford (an unqualified fee earner) who played a "fairly typical grade D supporting role, preparing indices, bundles etc."
Master Leonard directed that the matter proceed by way of written submissions and, following a thorough examination of the Legal Services Act 2007, found that the Act differentiated between "legal activity" and "reserved legal activity" and concluded -
"[the Legal Services Act] creates a narrow class of reserved legal activities. If work falling within that narrow class is carried out by an authorised person or an exempt person, such work is undertaken lawfully. If work falls to be considered merely a "legal activity" as opposed to a reserved legal activity, then it is undertaken lawfully, whoever undertakes it."
Further he found that Schedule 3 to the Act identified various categories of exemption, where the court had granted a right of audience or a right to conduct litigation or where (in respect of reserved instrument activities) the work was undertaken at the direction of and under the supervision of an authorised person.
He went on to find that the work undertaken by Miss.O'Gorman in preparing a draft bill of costs was a reserved activity, but that the costs were recoverable in principle, the work having been undertaken under the supervision and instruction of Miss.Moore, thus making Miss.O'Gorman an exempt person.
He found that the work undertaken by Mr.Bedford, which he described as "a fairly typical grade D supporting role, preparing indices, bundles, etc" did not constitute a reserved legal activity, and the costs were recoverable in principle.
He found that the work undertaken by Mr.Carlisle other than advocacy did not constitute a reserved legal activity, and the costs were recoverable in principle. In respect of the advocacy undertaken by Mr.Carlisle the Master found that, having granted him a right of audience, he was for the purpose of that hearing an exempt person, and the costs were recoverable in principle.
The Defendant was ordered to pay costs summarily assessed at £6,410.80
In concluding Master Leonard commented :
...It has been necessary for me, in a reserved judgement which attracted a degree of interest among costs professionals, to identify significant shortcomings in the Defendant's conduct both toward its former client and his properly authorised Costs Lawyer. The application itself was hard fought, the Defendant taking a robust stance and defending its position with sophisticated arguments which I ultimately found to be insupportable. The Claimant was given no choice but to see the matter through. Much trouble and expense could have been avoided had the Defendant delivered a bill when it was asked to do soMaster Leonard, judgment 8th May 2019, paragraphs 36 and 37
The Defendant's submissions on the costs of the application themselves furnish an example of the robust approach to which I refer. On proper analysis, they have no real merit. To accept them would have been to render Ms Moore's working life, in practical terms, impossible
Following the judgment, Miss.Moore said :
This is an important decision for those Costs Lawyers who act direct for members of the public. It enables us to function in a sensible and pragmatic manner in the same way that solicitors do, drawing when appropriate on the experience and abilities of other members of the costs profession and the wider legal profession who are not authorised to deal with matters direct. It means that our clients can be assured of the best possible service, giving them full access to specialist advice in respect of legal fees, without worrying that the costs will not ultimately be recoverableKerry-Anne Moore, Costs Lawyer, 8th May 2019
A full copy of the approved judgment is available below
The Claimant was represented by Erica Bedford of Kings Chambers, Manchester
The Defendant was represented by Fred Robbins, Costs Lawyer