The Court of Appeal in the case of Gempride Ltd v Bamrah & Anor  EWCA Civ 1367 has set down a marker in relation to misconduct in Detailed Assessment proceedings.
The Claimant had settled her case for personal injury in the sum of £50,000.00 and had instructed costing firm Lawlords to prepare a bill of costs. The Costs Draftsman who prepared the bill included hourly rates exceeding those that had been agreed in the retainer, thus breaching the indemnity principle.
Replies to Points of Dispute had also erroneously stated that Before the Event insurance was not available.
Master Leonard in the SCCO heard the matter at first instance where he decided that the Claimant should be limited in part of the bill to the litigant in person rate of £19 per hour.
On appeal, His Honour Judge Mitchell in Central London County Court reversed the decision because, amongst other things, Lawlords had failed to act upon the Claimant's instructions and actually acted contrary to those instructions.
The Defendant appealed and the Court of Appeal has upheld the appeal on numerous different grounds:
1. The Solicitor with conduct remained ultimately responsible for the bill of costs, whether the preparation was outsourced to an agent or not.
2. That the Judge on first appeal had failed to consider whether the Claimant's conduct was "unreasonable or improper". In signing the bill of costs to state that "the costs claimed do not exceed the the costs which the receiving party is required to pay me/my firm", the Claimant's conduct was improper.
3. The ruling on appeal relating to the BTE insurance was also wrong. HHJ Mitchell erred in finding that the Claimant was right to state that there was no cover available on the basis that the solicitor that the Claimant wished to instruct would not do so on the terms available.
The initial ruling of Master Leonard that the Claimant was not dishonest was followed, though the Court of Appeal expressed the opinion that the Claimant's conduct was serious even within the parameters of "unreasonable and improper" conduct.
The Court of Appeal considered that the original decision of Master Leonard to reduce the rate to the Litigant in Person rate was too harsh and it was decided that the Claimant's profit costs should be reduced by half.
Comment: Given the serious nature of the allegations and the breach of the indemnity principle, it could be argued that the Claimant was lucky to recover 50% of her profit costs in this matter. Indeed, if the initial decision had been that the conduct was dishonest, the sanction would undoubtedly have been far harsher.
This decision highlights the importance of ensuring that any agents instructed are acting in accordance with the rules and regulations. Responsibility rests with the Solicitor with conduct, so all bills of costs should be carefully checked before being signed to avoid any such pitfalls.