Recovery of costs in Non-Solicitor Cases
Introduction
1. This paper sets out the Bar Councils present understanding of the law and practice on the recovery of costs in civil litigation when a barrister is instructed for advocacy or paper work, but the client does not instruct a solicitor or other authorised litigator. Account is taken in this paper of the recent Court of Appeal decision, Agassi v Robinson1, which clarified a number of matters which had previously been very uncertain . Other still remain uncertain2.
2. It is, of course, a relatively unusual occurrence for a barrister to appear in the High Court or the County Court other than on the instructions of a solicitor. Nothing in this paper should be taken to suggest that the Bar Council envisages that it will, or should, become the normal arrangement.
Scope of this paper
3. Occasionally a barrister may be instructed for advocacy or litigation paper work services by a person, other than a solicitor, who is an authorised to conduct litigation. Currently this may occur upon the instructions of the following:-
a. Employed barristers3.
b. Patent agents conducting patent appeals4.
c. A small number of patent agents who have acquired the right to conduct any kind of litigation involving intellectual property5.
d. Officers of the Children and Family Court Advisory and Support Service6
In such situations it is believed that an order for costs will confer the same right to recover reasonable and proportionate costs of both barrister and such litigator as would be the case for a solicitor. Authorised litigators under the Courts and Legal Services Act 1990 are within the expanded definition in the Civil Procedure Rules of "legal representative". in the case patent agents in patent appeals the High Court held in Reiss Engineering Co Ltd v Harris7 that they were to be put for the purposes of costs in the same position as solicitors. This paper is not concerned with any further explanation of costs recovery in such cases.
4. The situations with which this paper is concerned are those where a barrister is instructed in a litigation context by a person who is neither a solicitor nor an authorised litigator. This may occur in the following situations:-
a. Tax appeals in which the barrister is instructed by a member of the Institute of Chartered Accountants, the Chartered Institute of Taxation, the Association of Taxation Technicians, the Institute of Indirect Taxation or the Association of Chartered Certified Acountants. Under the Bars Licensed Access scheme such tax professionals are entitled to instruct a barrister, if they have themselves acted (with or without a barrister) before the Commissioners or Vat Tribunal.
b. Under the Bars Licensed Access scheme a small number of individuals or bodies have been granted licences to instruct barristers for advocacy in court. Such licences are unlikely to have been garnted other than to persons who have demonstrated a high degree of understanding of the litigation process.
c. Public access. Since July 2004 the old prohibition on a member of the public instructing a barrister has ceased to exist. prior to accepting instructions under the public Access Rules a barrister must undertake an approved training course. Before accepting public access instructions a barrister must take reasonable steps to ascertain whether it would be in the best interests of the client or the interests of justice for the lay client to instruct a solicitor. Although it is likely to be relatively unusual for a barrister to undertake work in the High Court or County Court on public access, it is, subject to the above, perfectly permissible.
5. The emergence of a range of more flexible arrangements for representation in litigation was encouraged by Lord Woolf in "Access to Justice: the Final Report8. He also urged a re-examination of the rules as to costs of litigants in person:-
Such a consideration should take account of the desirability of promoting arrangements whereby litigants could undertake much of the preparation of their case but with access to legal advice and representation as necessary. This is often known as unbundling. Such an approach is of greater significance in view of the Bars recent decision to allow referrals from Citizens Advice Bureaux, which already provide significant assistance to litigants in person.
The statutory framework
6. The Courts and Legal Services Act 1990 envisages that in every case in court there will be somebody who has the "right to conduct litigation". By s.28(2) that right exists in the following situations:-
a. Right to conduct litigation granted by an authorised body, such as the Law Society.
b. Right to conduct litigation conferred by an enactment.
c. Right to conduct litigation granted by Court in relation to the proceedings.
d. Litigant in person9.
7. Cases carried out by barristers on public access are, of course, likely to fall within category (d) above, that is under s.28(2)(d). Until now licensed access cases have also fallen within s.28(2)(d) -- in other words, the lay client has signed and submitted the claim form or appeal notice in person, and has been a litigant in person for the purposes of formal steps at court.
8. It may be that in future tax professionals and others who wish to secure the cost savings and other advantages of direct instruction of the Bar will seek a grant from the court under s.28(2)(c). If they do so, it seems that costs both of the barrister and the tax professional will be as recoverable as if a solicitor had been acting. In other words, this may be a route to avoid the restrictions on costs recovery illustrated by the Agassi decision. Since the Court of Appeal in Agassi praised the scheme for tax appeals on licensed access as "certainly both a new and better way of providing advocacy services"10, and as having clear advantages, and said that it was "obviously desirable" that its use should be encouraged, it may be that judges will see merit in such applications in tax appeals. At present, however, there is no experience of, or judicial guidance on, grants by the court under s.28(2)(c).
When the "litigant in person" rules apply
9. It was held by the Court of Appeal in Agassi that in a case where the right to conduct litigation is exercised under s.28(2(d) the litigant is a "litigant in person" for the purposes of the CPR.
10. It is not wholly certain whether this will be the position where a the litigant is a corporate, as opposed to natural, person. In Jonathan Alexander Ltd v Proctor [1996] 1 WLR 518 a limited company was represented in court by a director: the Court of Appeal held that the company was not a " litigant in person" . It may be argued that it would then be curious for the company to be a " litigant in person" when represented by counsel. The Bar Council cannot, of course, offer any advice how such arguments might be resolved. However, barristers advising corporate clients may consider it prudent to direct attention to the risk, at least, that for costs purposes they will be subject to the restrictions on costs recovery which apply to litigants in person.
The effect of the "litigant in person" rules
11. The general principle upon a standard basis assessment is that costs will be allowed which are reasonably incurred, are reasonable in amount and are proportionate. In the case of a "litigant in person" that general principle is subject to a number of specific rules contained in CPR 48.6. This provides in part:-
48.6(3) The litigant in person shall be allowed --
a. costs for the same categories of --
i. work; and
ii. disbursements,
which would have been allowed if the work had been done or the disbursements had been made by a legal representative on the litigant in persons behalf;
b. the payments reasonably made by him for legal services relating to the conduct of the proceedings; and
c. the costs of obtaining expert assistance in assessing the costs claim.
12. This rule carries into effect the plan of the Litigants in Person (Costs and Expenses) Act 197511, which provides in s.1(1):-
Where, in any proceedings to which this subsection applies, any costs of a litigant in person are ordered to be paid by any other party to the proceedings or in any other way, there may, subject to rules of court, be allowed on the taxation or other determination of those costs sums in respect of any work done, and any expenses and losses incurred, by the litigant in or in connection with the proceedings to which the order relates.
13. CPR 48.6 permits the recovery of:-
a. Court fees.
b. Fees paid to a barrister for advocacy, drafting and advisory work.
c. Administrative outlay on such things as couriers, photocopying and document preparation -- probably12.
d. Provision of expert advice. This may include a tax expert discussing issues with counsel, and assisting with the preparation of a skeleton argument; but the dividing line between legal services (irrecoverable) and expert advice (recoverable) is, said the Court of Appeal, "a matter of some difficulty"13.
e. Other disbursements which "would normally have been made by a legal representative" (i.e. solicitor or other authorised litigator), if there had been one.
f. The fees of a costs draughtsman.
g. An amount which is normally calculated at a presceribed hourly rate, currently £9.25 per hour, for time spent by a litigant in person on case preparation including any work which might properly be charged for by a solicitor. This is subject to a ceiling of two-thirds of the amount which would have been allowed to a solicitor for doing such work14
14. On the other hand, CPR 48.6 does not permit the recovery of fees of a person who is not a tax professional or other authorised litigator for general assistance in the conduct of a case.
15. The suggestion has been heard that the only two-thirds of a barristers fees are recoverable. That suggestion is incorrect: it derives from a mis-reading of the provision in CPR 48.6(2) placing a cap on the recovery by a litigant in person for his own time. There is no two-thirds cap on the recovery of counsels fees, expert fees, court fees, other permissible disbursements, or, indeed, a solicitors fees (e.g. if a litigant who ultimately acts in person has made some use of a solicitors services at an earlier stage).
The costs advantages and disadvantages of non-solicitor access to the Bar in litigation
16. A comparison of the cost to a client of different modes of representation will always depend on the rates being quoted by the particular professionals involve. Nevertheless, both the Bar Council and individual barristers are starting to be asked to give guidance on the costs implications of public and licensed access for court work. Therefore, it is hoped that the following general propositions may be of some background assistance.
17. A client who is minded to use public access will almost always save money by doing so. This is because of the limitations on the range of activities performed by the barrister: the client on public access will himself be carrying out much of the administrative work that normally would be performed by the solicitor15. There is nothing in the Agassi decision to impede a successful public access litigant from the same recovery of fees for counsel, experts, and all other disbursements that would have been made if there had been a solicitor. Such a litigant will also be entitled to compensation for his own time on the same basis as a litigant who acts wholly in person.
18. The situation is slightly less straightforward in the case of licensed access, such as in tax appeals. The direct cost to the litigant is likely to be lower than if a solicitor is instructed. In the Agassi case the Senior Costs Judge, who was sitting as an Assessor with the Court of Appeal, advised that in his experience the fees charged by a firm of solicitors might well have been three times as high as those of Tenon, the tax professional firm who acted for Mr Agassi. Therefore, if such a litigant loses his case, he may in most cases save money by using licensed access.
19. Similarly, the arrangement is likely to be cost-effective for the successful client if the licensed access intermediary (such as an accountant) is granted the right to conduct litigation under s.28(2)(c) for the particular case.
20. What is less obvious is whether such a litigant will have saved money if he wins his case, but there is not a grant of litigator rights under s.28(2)(c). In the case of Mr Agassi the preliminary assessment was that 41% of the bill of Tenon, his tax professionals, was for activities which could be recoverable under the principles of the Court of Appeals decision. Whilst in future cases tax professionals may be able to focus their services to a greater extent within the areas of activity which are cost-recoverable, it seems almost inevitable that parts of their services will be outside recoverability. The cost of such activities would be recoverable if performed by a solicitor. Nonetheless, the general experience is that it is rare for 100% of incurred costs to be recovered in a court assessment. Therefore, it may become a matter for fine judgment by a client whether he will be better off, if he wins his case, with a larger irrecoverable percentage of a lower bill or a smaller irrecoverable percentage of a higher bill.
21. The Legal Services Commission has recently used licensed access for a publicly funded High Court case in Khan v Custome & Excise16 where a barrister conducted an appeal from the Vat Tribunal on the instructions of a member of the Chartered Institute of Taxation.
1] [2005] EWCA Civ 1507, The Times December 22nd, 2005
2] Owing to that uncertainty the Bar Council has not previously been able to issue any guidance on this topic.
3] By s.28 Courts and Legal Services Act 1990 as amended the Bar Council is authorised to grant the right to conduct litigation. It has granted the right to conduct litigation to employed barristers where they are acting for their employer, or, if their employer is a solicitor, for a client of their employer.
4] By virtue of s. 104(2) Patents Act 1977
5] The Chartered Institute of Patent Agents has been authorised to grant such right to its members pursuant to the Courts and Legal Services Act 1990.
6] By s.15 Criminal Justice and Court Services Act 2000
7] [1987] RPC 171
8] para 45, July 1996 HMSO
9] The actual language of the sub-section is "where he is a party to those proceedings and would have had a right to conduct the litigation, in his capacity as such party, if this Act had not been passed". In Agassi the Court held that this meant simply -- a litigant in person.
10] Agassi paragraph 16
11] This Act was passed to reverse the result of Buckland v Watts [1970] 1 QB 27 in which the Court of Appeal held that a layman could not charge for his time and, therefore, could not make any recovery in respect of his time and labour if he acted as a litigant in person. It always was the case that a litigant in person could recover court fees and disbursements such as on experts.
12] In Agassi the judgment reads at paragraph 65: "... we believe that [counsel for the Revenue and Law Society] might accept that some items in Tenons bill (e.g. such as the cost of couriers, telephone and fax and court filing fees) are "expenses" within the meaning of section 1 of the Litigant in Person (Costs and Expenses) Act 1975".
13] Agassi paragraph 76-77
14] CPR 48.6(2).
15] In GE Capital Bank v Rushton and Jenkin "The Times" December 14th, 2005, which was the first case to be conducted on public access in the Court of Appeal, the claimant, whose barrister was instructed by a solicitor, presented a skeleton of costs of £68,082, whereas the cost summary of the defendants, whose barrister was acting on public access, was £6,400.
16] (2005) STC 1271
This guidance was issued by the Access to the Bar Committee
