This post considers the decision of Murray v Oxford University Hospitals NHS Trust an appeal to Stewart J from a decision of Master Campbell. It is a case concerned with the mis-certification of a bill of costs in detailed assessment proceedings and is one of only two reported cases post the landmark Court of Appeal case of Gempride v Bamrah (the other being a decision of Deputy Master Friston in the Senior Courts Costs Office (SCCO)).
But first a quick re-cap. CPR 44.11 provides:
The court may make an order under this rule where—
(a) a party or his legal representative, in connection with a summary or detailed assessment, fails to comply with a rule, practice direction or court order; or
(b) it appears to the court that the conduct of a party or that party’s legal representative, before or during the proceedings or in the assessment proceedings, was unreasonable or improper.
Gempride v Bamrah was a judgment handed down in July 2018, in which the Court of Appeal considered whether the inclusion within the bill of costs of the wrong hourly rate, and inaccurate information given in the reply to the points of dispute about alternative methods of funding, amounted to misconduct in the detailed assessment proceedings pursuant to CPR 44.11. The Court of Appeal held first that:
- In certifying a bill of costs which had an hourly rate of £280 per hour when the solicitor, Ms Bamrah (and on the facts of the case, also the client) knew that the proper hourly rate was £232, even where (on the findings of the trial judge) Ms Bamrah had an honest belief that it was proper for her to have retrospectively increased her hourly rate as a result of a conversation she had with her costs draftsman, she was guilty of misconduct. This is because “her conduct in allowing Part 1 of the bill to be submitted and then maintained with a rate which she knew was in excess of the contractual rate was at least reckless. The analysis which led her to that conclusion has certainly never been explained. I consider that her conduct permitted no reasonable explanation and, in the light of the indemnity principle, no competent solicitor acting reasonably would have certified Part 1 of the bill of costs in the circumstances in which Ms Bamrah did so.” (Paragraph 127.)
- It was misconduct to have asserted in the reply that before the event insurance was not available to Ms Bamrah, when in fact it was available to her but not on terms that she (as the solicitor for herself) had found acceptable. The Court of Appeal accepted the finding of the judge that Ms Bamrah did not intend to mislead Bamrah in making that reply, but held that they were indeed misled as they were bound to be.
In Murray, five points of mis-certification were relied upon by the defendant:
- The bill certified that there had been no interim payments on account of costs when interim payments of £90,000 had been made. It was accepted that the bill should have contained this information.
- The bill stated that the risk assessment was conducted by Withy King, when in fact it was conducted by Marshall and Galpin.
- The bill claimed a 100% success fee. The risk assessment stated that there was a 60% prospect of success, which it was said equated to a 67% success fee.
- The statement of reasons for the percentage increase in the bill narrative was inaccurate and bore no resemblance whatsoever to the true statement of reasons.
- The bill narrative inaccurately stated the Part 36 risk as: “if this happens we will not claim any costs for the work done after the last day for acceptance of the offer or payment”. The conditional fee agreement (CFA) actually stated: “… if this happens we will not add our success fee to the basic charge for the work done after we receive notice of the offer or payment.”
The first two allegations were described by the costs master (upheld on appeal) to be trifling, and not to have benefitted the claimant.
The third allegation failed because the CFA itself provided for a 100% success fee (albeit the risk assessment concluded that there was a 60% chance of success). There was therefore no mis-certification as the bill of costs was not claiming in excess of what was recoverable pursuant to the CFA.
The appeal focused on the fourth and fifth allegations. The master had held that they did not amount to misconduct within CPR 44.11. This was upheld by Stewart J. The court relied upon three factors in coming to this decision:
- First, the court held that there had been no intention to mislead; the errors were mistakes. This is, of course, not determinative (see the Bamrah decision), but where there is an intention to mislead, this will usually mean that there is misconduct.
- Secondly and importantly, the defendant had not in fact been misled (the defendant had received the CFA itself and their points of dispute had not relied upon the offending risk assessment).
- Thirdly (although this was not made explicit in the judgment), the conduct permitted of a reasonable explanation in that the mis-certifications were likely to have been based on the same error, namely of using the standard Withy King risk assessment terms rather than the ones that were relevant at the time the risk assessment had been filled in (by previous solicitors).
So what marks this out from the Bamrah case?
First, of course the defendants were not actually misled in this case as occurred in Bamrah. This was because the CFA with the correct information had in fact been voluntarily disclosed to the defendants. Thus the defendant was able to see what the CFA said and knew that the bill of costs was inaccurate.
Secondly and crucially, however, is the fact that there was a rational and understandable explanation as to how the wrong information had got into the bill of costs. This marks it out from the Bamrah case, where the Court of Appeal was still none the wiser as to Ms Bamrah’s explanation for how it was that she could have certified the bill of costs even in a case where she had made several witness statements and given extensive oral evidence before the judge. Thus, the Court of Appeal had little choice but to consider that her conduct was reckless, which is, of course, sufficient to amount to misconduct. Stewart J’s decision in Murray is an acceptance by the court that mistakes can be made in bills of costs, but as long as there is a reasonable explanation for the mistake, this will fall short of misconduct. This will be welcome news for (some) practitioners!