M Stuart & Others v A Croucher or Reid & Others (2015)

An action for damages was raised in the Court of Session by the family members of Russell Stuart, who was killed in a road traffic accident. Liability was admitted. The claims were agreed, save those of the grandchildren which required to proceed to Proof.  The court issued various interlocutors dealing with expenses. Settlement could not be agreed and the matter went to taxation.

Counsel appeared on behalf of both parties at the taxation. The auditor deducted £13,000 from the pursuers' counsel's fee in the account and disallowed counsel's fee of £1,800 for the taxation. Over £9,500 was deducted from the defender's account.

The pursuers lodged a note of objections to the taxation. They sought reinstatement of the sums deducted in respect of counsel's fees, a full reduction of the sums awarded to the defenders and the expenses of the hearing. There was no challenge from the defenders.

Counsel for the pursuer challenged the Auditor's decision on two broad, overlapping grounds. Firstly, that he failed to provide adequate reasons and secondly that his decisions on each branch of the claim were unreasonable. A hearing was fixed before Lord Woolman.

The Auditor's task is to determine whether the proposed fee is fair and reasonable. A party is entitled to challenge the decision. From the body of caselaw which has developed in this area, Lord Woolman noted the following regarding the respective roles of the Auditor and the court:

  • The Auditor essentially acts as a valuer.

  • He is expected to apply his knowledge and experience in carrying out his task of assessing a fair and reasonable fee. 

  • The court will be slow to disturb his decision if he has properly exercised his discretion.

  • It will not substitute its own views for those of the Auditor.

  • It will not attempt to tax an account itself

  • The court will, however intervene if the Auditor did not have sufficient materials on which to proceed, or his decision is unreasonable.

Lord Woolman rejected the pursuer's submission that the Auditor had failed to provide adequate reasons for his decision, noting that the Auditor is not required to issue lengthy decisions concerning every point,

Counsel for the pursuer submitted that, in the absence of a table of fees for counsel, the correct question to ask was: What would a reasonable solicitor be prepared to pay to instruct counsel? He made reference to two decisions of the Outer House, in particular Lord Glennie's statement in Marshall v Fife health Board:

"The Auditor should only disallow an item if it can truly be said that it was unreasonable to incur the expense in the sense that a competent solicitor acting reasonably would not have incurred it….the reasonableness test applies to Counsel's fees too…there is no reason why an award of expenses on a party and party basis should not provide full recovery for a successful party who has acted reasonably in the litigation and whose expenses have been reasonably incurred and are reasonable in amount. "

Counsel for the pursuer submitted that the Auditor did not apply the approach narrated above. Lord Woolman noted that the Auditor expressly said that he did apply Lord Glennie's approach and had given reasons for reaching his decision on the point. Accordingly, there was no reason to disturb the Auditor's decision.

Counsel argued that it was appropriate for him to attend the taxation because the Auditor's decision in relation to counsel's fees is of considerable importance, not only to the present pursuers but to their agents in future cases. Again, Lord Woolman refused to interfere with the Auditor's conclusion that the issues raised at taxation were sufficiently novel or complex to justify the instruction of senior counsel. There were other challenges; however Lord Woolman declined to consider them as they had not been raised before the Auditor. 

In light of this decision, insurers should consider: are the fees charged reasonable or could they be reduced at taxation?