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Know your costs lawyers from your costs draftsmen

The Court of Appeal delivered judgment in the case of Gempride v Bamrah recently, a case on misconduct in detailed assessment proceedings. The case is the first time the Court of Appeal has considered CPR 44.11 and is essential reading for any solicitor who sub-contracts out costs work to a cost specialist.

The facts are slightly unusual in that Ms Bamrah was both the claimant in the underlying claim (with a costs order in her favour in a personal injury action) and the solicitor on record (being a sole practitioner in her own firm). She had instructed a firm of cost specialists to manage the detailed assessment proceedings. In those proceedings she certified a bill of costs with an hourly rate in excess of the one to which she was entitled. She had also signed points of reply in which she wrongly asserted that she did not have any alternative methods of funding her claim (thus justifying her use of a conditional fee agreement (CFA) with an after-the-event (ATE) premium).

An application for sanctions was brought by the paying party (Gempride) on the basis that Ms Bamrah had misconducted herself. Ms Bamrah’s case was that any misconduct was the fault of her costs consultants and not her. Gempride did not pursue the costs consultants as it was their case that Ms Barmah remained liable for their conduct.

The case came before the Court of Appeal on a second appeal. The court took the opportunity to set out the statutory provisions by which costs lawyers are regulated. As the costs consultants that Ms Bamrah had instructed were not regulated costs lawyers, the Court of Appeal had no difficulty in finding that Ms Bamrah, as the solicitor on record, remained liable for their conduct under ordinary agency principles as against Gempride.

Furthermore, the court held that:

“… for the purposes of the supervisory jurisdiction of the court, solicitors remain responsible for the conduct of anyone to whom they subcontract work that they (the solicitors) are retained to do, a principle of particular importance where the subcontractor is not a legal representative and so does not himself owe an independent duty to the court.”

The court reaffirmed its earlier decision in the case of Crane v Canons Leisure Centre in which the court held that solicitors remained responsible for the work done on their behalf by costs draftsmen, and that the ability of the costs draftsmen to appear in court as advocates was founded upon the fiction that they were temporary employees of the solicitor.

The court held that the fact that the costs consultants held themselves out as being costs lawyers was not to the point. They were not costs lawyers and did not have the right to conduct litigation. Thus, they were only able to conduct litigation as the temporary employees of the solicitor on record. Accordingly, Gempride were entitled to bring a CPR 44.11 application against the solicitor, even if the conduct complained of was that of the costs consultant’s.

This is a salutary lesson to all solicitors who subcontract out costs work:

  • It is essential that the solicitor is aware whether he or she is sub-contracting out to a costs lawyer (who is regulated and has an independent right to conduct litigation), or a costs draftsman who does not.
  • If the work is sub-contracted to a costs-draftsman, their authority to conduct litigation is created by the legal fiction that they are the solicitor’s temporary employee. The solicitor therefore remains liable for their conduct. If an opposing party wishes to bring a CPR 44.11 misconduct application, or indeed a wasted costs application, it will be against the solicitor and not the costs draftsman.
  • It may be different if the work is sub-contracted out to a costs lawyer. However, the wording of paragraph 103 of the judgment suggests that even in those circumstances, the solicitor on record remains ultimately responsible for the conduct of the litigation.

You have been warned!

39 Essex Chambers Katharine Scott

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