In Cafolla v Kilkenny [1] the Irish High Court held that when costs are taxed in default of agreement, the key issue assessing a case is the amount of work done by lawyers and expert witnesses. The original case was admitted to the Commercial Court, but settled before Trial date and costs were to be taxed. The Defendants, the paying parties, challenged three aspects of the Taxing Master’s award in respect of the Plaintiff’s costs, namely: 

  • The reduction of the solicitor’s professional fee to €550,000 (claimed at €620,000)
  • The reduction of Senior Counsel’s brief fee to €75,000 (claimed at €100,000)
  • The reduction of Junior Counsel’s brief fee to €50,000 (claimed at €65,000)

The Defendants argued that, firstly, the Taxing Master did not examine the nature, extent and value of the work done by lawyers, and did not correlate the amount allowed to time, labour and expertise. Secondly, he overvalued the property in the case. Thirdly, he did not make any reduction for the concession of liability two and a half weeks before the Trial date. Fourthly, he allowed fees to the Plaintiff, which were grossly disproportionate to those of the Defendant’s solicitors and Counsel. The Plaintiff rejected these arguments.

The Court criticised the Taxing Master’s failure to examine the time records of the Plaintiff’s solicitors, as a serious error on his part and a breach of his obligations under the Courts and Court Officers Act, 1995 and the Rules of the Superior Courts. Under the 1995 Act, the Taxing Master should focus on the work actively undertaken by lawyers.  (By contrast, prior to the introduction of the 1995 Act, the main focus was on comparable cases.)

The Court was critical of the fact that the basis for the award of €550,000 for the solicitor’s professional fee was unintelligible from the Taxing Master’s report, because the report did not outline the factors considered or the analysis undertaken. The Court held that the value of the matter in dispute could impact on the amount of fees chargeable, and that this particular factor should be considered by the Taxing Master. 

The Court indicated that whilst comparing costs with other similar cases is a recognised way of cross-checking costs allowed, there is a difficulty in finding appropriate comparator cases. The Court suggested that an obvious starting point for an analysis of fees would be what the opposing lawyers charged their client.

The Court directed that a different Taxing Master should reassess the costs in the case.