Guidance on Key Legal Principles in Protopapas Solicitors v John Michaelides & Anor Case: Costs, Proportionality, and Solicitor's Fees

Citation: [2023] EWHC 2929 (SCCO)
Judgment on

Introduction

In the case of Protopapas Solicitors v John Michaelides & Anor [2023] EWHC 2929 (SCCO), the Senior Courts Costs Office (SCCO) provided detailed guidance on several significant legal principles. Costs Judge Leonard addressed the issues of cost assessment basis, proportionality of costs, entitlement to interest, solicitor’s fees, hourly rates, and general conduct in cost-related litigation. This article analyses these key topics and elucidates the applied legal principles, referencing relevant parts of the case summary.

Key Facts

The dispute emerged from a common-law assessment ordered by HHJ Hellman for the Claimants’ outstanding fees against the Defendant clients. Subsequently, the costs of the assessment process were summarized, and both parties made written submissions. The Claimant sought costs on an indemnity basis due to an outcome exceeding an initial settlement offer. The Defendants challenged various aspects of the claimed costs, including hourly rates, court fees, and disbursements. Other crucial points of contention were related to interest entitlement post-judgment, delay in proceedings, and breakdowns prepared by the Claimant.

Basis and Scope of Costs Award

Costs Judge Leonard affirmed that the Claimant could not request an indemnity basis for costs after a standard basis order was already made, in accordance with CPR 44.3(4). An indemnity basis is not warranted merely because a party beats its own offer. Leonard CJ also reiterated the principle that any doubt as to reasonableness and proportionality must benefit the paying party, here the Defendants.

Proportionality

Judge Leonard referenced the case of West v Stockport NHS Foundation Trust [2019] EWCA Civ 1220 to address the principle of proportionality. It was determined that costs must be reasonable and proportionate to the matters in issue, considering factors like the sums involved, complexity, and the conduct of the paying party. An overall reduction from the original claim served to calibrate the proportionality of the assessed costs, despite the complexity introduced by the Defendants’ detailed disputes.

Entitlement to Interest

The matter of interest was covered under the judgment by HHJ Hellman, granting the Claimant interest subject to a common law assessment. Judge Leonard emphasized that he did not have the jurisdiction to reinterpret this order. The principle from Simcoe v Jacuzzi UK Group plc [2012] EWCA Civ 137 was cited, stating that interest runs from the date of judgment, but a Costs Judge’s jurisdiction to alter interest provisions among parties is limited.

Solicitor’s Fees and Hourly Rates

The court upheld the appropriateness of higher hourly rates (£200) for advocacy work and lower rates (£125 to £150) for documentary preparations by an experienced costs professional. It reinforced the principle that hourly rates should be reflective of the experience and qualifications of the fee earner.

Conduct and Litigation Management

Throughout the judgment, emphasis was placed on the need for good order of papers, efficient advocacy, and accurate time estimations for hearings. Failure to meet these standards resulted in disallowed costs.

Outcomes

Both practical and legal outcomes were drawn from the case:

  • The Claimant’s costs were awarded on a standard basis, not on indemnity.
  • VAT on costs could be recovered as the Claimant partnership was no longer registered for VAT.
  • Hourly rates for specific tasks were considered reasonable based on the fee earner’s experience.
  • Some costs claimed by the Claimant, such as courier fees and disallowed fee earner time at hearings, were deemed not recoverable.
  • Pre-judgment interest considerations were referred back to HHJ Hellman.
  • The Claimant was awarded additional costs due to the Defendants’ conduct, totaling £23,428.40.

Conclusion

The judgment in Protopapas Solicitors v John Michaelides & Anor stands as an instructive example of the stringent approach adopted by senior costs courts in the assessment of solicitor-client cost disputes. Judge Leonard meticulously applied established principles regarding the standard versus indemnity basis for costs, the proportionality of claimed costs, and the limits of a Costs Judge’s jurisdiction over interest entitlement. Furthermore, the case underlines the importance of proper litigation conduct, such as expedient serving of paperwork, precise hearing time estimates, and accurate and valuable hearing preparations. Legal professionals in the UK must remain cognizant of these principles when engaging in cost-related court proceedings.

Related Summaries