High Court considers the issue of costs, and how these should be calculated when a Regulator’s Rules are silent upon the specific mechanism for calculating costs incurred.

Judgement date:16 May 2014

The Bar Standards Board sought a Judicial Review of a decision of the Disciplinary Tribunal of the Council of the Inns of Court on the issue of costs; it was entitled to do so as there was no appeal provision in relation to costs alone, only conviction or sentence.

Background 

On 6 September 2012, disciplinary proceedings were determined in favour of the ‘Interested Party’, a Barrister not currently in practice, and not practising at the time of the complaint against her that led to the disciplinary charges.  In its decision, the Tribunal ordered that the Bar Standards Board should pay for her costs and appoint an Assessor to determine the amount of costs payable, as allowed for under the Disciplinary Tribunal’s Regulations 2009, the Rules under which the Tribunal operates.  In a Decision dated 14 February 2013, the Assessor ordered that the Bar Standards Board should pay costs in the sum of £27,521.50, which included a figure for the costs of the Barrister’s time, claimed at the rate of £120 per hour.  The only dispute in the Judicial Review was as to the rate applied for the hours spent by the Barrister in defending herself.

The Judicial Review arose because the Bar Standards Board did not agree with the basis upon which the Assessor reached the figure of £120 per hour.  The Assessor took the view that he was bound by the case of Miller v Bar Standards Board [Citation], a Decision of Ryder J sitting as a visitor, in 2012.  In those proceedings, Ryder J applied the principle in London Scottish Benefit Society v Chorley [1884] 12 QBD 452, that a solicitor acting as a Defendant in Person was held entitled to have reasonable professional remuneration for work which, if he had not performed it himself, would have had to be done by another solicitor and paid for by his unsuccessful opponent.  In Miller, Ryder J took the view that had the CPR applied:-

The Appellant as a Litigant in Person would be entitled to the amount of costs for which he can prove financial loss (CPR Rule 48.6(4)(a)) and that the measure of financial loss where a Barrister or Solicitor is concerned is what it would have cost him to instruct another lawyer to carry out the work he had done for himself”[21].

The Assessor took the view that he was bound by this decision, and concluded that by reason of the Interested Party’s status as a Barrister and the fact that she conducted the pleadings herself, she had established “financial loss sufficient to allow recovery of two-thirds of the rate a solicitor would have charged”.  The deduction of one-third arises as a result of the operation of Rule 48.6(2) of the Civil Procedure Rules 1998 (CPR), which indicates that the costs allowed for a litigant in person under the CPR must not exceed two-thirds of the amount which would have been allowed if the litigant in person had been represented by a legal representative.  It should be noted that, under the CPR, a litigant in person includes a Barrister who is acting for him/herself. 

The Bar Standards Board challenged that Decision; it was its view that on a proper construction of the CPR, as guided by the decision in the Court of Appeal in Malkinson v Trim [2002] EWCA Civ 1273, the Interested Party was entitled to no more than to that which a litigant in person would have been entitled, notwithstanding any skills she may have possessed.  It was the Bar Standards Board’s view that the expenditure of her own time and skill did not amount to financial loss within the meaning of Rule 48.6(4)(a) of the CPR ; it therefore disagreed with the analysis of Ryder J in Miller v Bar Standards Board, i.e that she was entitled to base her claim on what an instructed solicitor would have cost.

The issue therefore turned upon whether the Interested Party could demonstrate financial loss for her time and skill on an hourly rate, closely akin to what she would have charged as a Barrister, as she was in the position of possessing the relevant skills, and could represent herself.

Decision

In this case, Moses LJ, with Collins J in agreement, analysed the case law closely.  In particular, he considered whether the CPR 1998 altered the principle established in the London Scottish Benefit Society case that a Solicitor/Litigant acting in person was entitled to costs incurred in the expenditure of his own professional skill.  In the Court of Appeal in that case, the decision of the Divisional Court was upheld, and the Court concluded that: “a Solicitor who defends in person and obtains judgment is entitled to the same costs as if he had employed a Solicitor, except in respect of items for which the fact of his acting directly renders unnecessary” [12]. 

However, Moses LJ explained that the CPR Rule 48.6(6), read with the Costs Practice Direction, overturned that principle.  The CPR determines that neither a Solicitor nor a Barrister acting in person could include in their proof of financial loss, under CPR 48.6(4)(a), the cost of the provision of their own professional skill and judgment in their own case (unless a solicitor is represented in the proceedings by their own firm, in which case financial loss can be claimed).

The Bar Standards Board had relied upon the Decision in Malkinson v Trim.  In that case, Chadwick LJ, in the Court of Appeal, opined that:

One effect of CPR 48.6(6)(b), read in conjunction with Section 52.5 of the Practice Direction, is that there is now more clearly recognised a distinction between the Solicitor/Litigant who provides, in connection with his own litigation, professional skill and knowledge in the course of his practice as a Solicitor – that is to say, who ‘is represented by himself in his firm name’ —and the solicitor litigant who provides skill and knowledge in what might be described as ‘his own time’—that is to say, outside the course of his practice as a solicitor and (typically) outside the office. The latter is treated as a litigant in person for the purposes of CPR rule 48.6, and so is subject to the restrictions imposed by that rule, including the two-thirds restriction imposed by paragraph (2). The former is not” [22].

In seeking to reconcile the cases cited by each party, Moses LJ opined that a Barrister acting on his own behalf is not entitled to costs representing the expenditure of his own time and skill under CPR 48.6.  As he is not a Solicitor coming within the Practice Direction (being a solicitor who is representing himself through his own firm), there is no means by which he can avoid that conclusion and claim costs unless he employs someone to act on his behalf.  Therefore, he concluded that Ryder J’s interpretation of the CPR in the case of Miller v Bar Standards Board was wrong.  In Moses LJ’s view, “It follows that the application of CPR 48.6, should have led to the conclusion that the Interested Party was not entitled to charge for the expenditure of her own professional skill and judgment” [16].  

Notwithstanding this analysis, Moses LJ addressed a more fundamental point in this case, being whether the CPR should have applied in any event.  The Assessor had asserted that the CPR was persuasive, but he gave no reason for that conclusion.  It was Moses LJ’s view that the CPR was not even persuasive.  The Bar Standards Board had not provided in its Rules that the CPR should apply in such circumstances.  He opined that if a defendant Barrister, acting in person, was going to be deprived of costs assessed on a London Scottish Benefit Society basis, then the Barrister would employ another Barrister, or Solicitor and Barrister, and claim his costs in the normal way.  Moses LJ concluded that, in the absence of any particular reason as to why the CPR should be persuasive, the correct basis for assessing the costs was in accordance with the Bar Standard Board’s own Rules, namely, to award such costs as the Tribunal thinks fit.  In concluding this matter, he expressed that “the financial loss a Barrister has incurred includes the expenditure of his own professional skill” [19].

He ruled that the Interested Party was entitled to the costs represented by her expenditure of professional skill.  In principle, she was therefore allowed to obtain costs on an hourly rate; although Collins LJ expressed that £120 was too high, and adopted the view that a reasonable figure would be £60 per hour, taking into account that the Barrister was not practising at the time.

The determination of the Assessor was therefore quashed and an award of costs was calculated on the basis of a rate of £60 per hour.