May 9th, 2014

Court of Appeal considers time-limited offers

Saigol v Thorney Ltd (T/A/ Thorney Motorsport) [2014] EWCA Civ 556

The Court of Appeal considered the relevance of an offer to settle which was only left open for acceptance for a period of 22 hours.  S had taken his 20-year old BMW to T for it to be modified for use in racing.  T subsequently sought more than the agreed price of the work and refused to return the vehicle pending payment.  S failed to pay and T advertised the car for sale.  S successfully secured an injunction and issued proceedings for damages.  T brought a counterclaim.

The parties attended a mediation, which was ultimately unsuccessful and T made an offer to accept £2,000.00 the following day, which was open for acceptance for a period of 22 hours only.  The matter proceeded to trial and for reasons that are unapparent from the judgement the trial of this straightforward, low-value dispute was allowed two days of Court time before a circuit judge.  The trial judge found for S against T for £745 of his claim and for T against S for £375 of its claim: T would therefore pay a balance of £370 to S.  On the question of costs, the trial judge considered the claim to be a draw and had found that the parties had advanced financial claims of ‘unjustified magnitude’, but ordered S to pay T’s costs from 21 days after T’s offer as S had failed to better it.  Notwithstanding the limited sums in issue in the claim itself, S sought legal costs of £67,000 and T sought legal costs of £77,000.  S successfully appealed the order as to costs.  Rimer LJ found that: ‘those who are really serious about achieving [settlement] do not make offers that are open for just 22 hours and should receive no credit for making offers that are so time-limited’ and substituted the trial judge’s order for one of no order as to costs, leaving the parties to bear the £144,000 in legal costs apparently incurred.

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July 10th, 2013

The ‘Doorstep Regulations’ and Defective CFAs

Ridge v Lupton & Place Limited

DJ Obodai, Manchester County Court

Following the successful settlement of the Claimant’s claim for damages against his former employer for noise induced hearing loss in August 2011, the case was listed for detailed assessment of the Claimant’s costs.

It became apparent that the Claimant’s conditional fee agreement had been signed at his home, and the Defendant raised the issue of compliance with the Cancellation of Contracts made in a Consumer’s Home or Place of Work etc Regulations 2008 and contended that unless the CFA agreement incorporated a cancellation notice in the appropriate format, the agreement was unenforceable.

The Claimant’s solicitors, MRH Solicitors of Bolton, did not admit any potential defect, but instead entered into a new CFA with the Claimant in March 2013.  This rescinded the earlier CFA and applied retrospectively to cover all work done from the date of the Claimant’s initial instruction.  The agreement was concluded by post in order that the 2008 Regulations would not apply.

The Defendant argued that while retrospective CFAs and uplifts were permissible in certain circumstances, in the present case the Claimant’s attempt to rectify the defective retainer should fail. If at the time of the adverse costs order there had been a defect in CFA rendering it unenforceable, such that the defendant had no liability under that costs order, that defect could not be abolished by a retrospective agreement.  The retainer could not be changed to increase the costs burden on the paying party after the adverse costs order had already been made.

The District Judge accepted the Defendant’s argument, and found that the retrospective CFA was not effective and did not alter the Defendant’s liability for costs.  The Claimant’s profit costs were assessed at nil and the Claimant recovered only disbursements, paying the Defendant’s costs of the detailed assessment.

Brodie & Company were instructed to deal with the question of costs on behalf of the successful Defendant.

Hugh Rimmer (counsel for the Defendant)

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January 21st, 2013

Court of Appeal considers the 2008 Cancellation of Contracts Regulations:

The Court of Appeal determined the application of the Cancellation of Contracts made in a Consumer’s Home or Place of Work etc Regulations 2008 in the case of Robertson v Swift [2012] EWCA Civ 1794.  The contract concerned an agreement between the Claimant removal company and the Defendant customer.  The agreement was entered into over the course of two visits to the Defendant’s home and did not provide for the requisite cancellation notice.  The Defendant sought to cancel the agreement within 7 days after he found a cheaper quote from another company.  The Claimant sued for its cancellation charge, as set out in the agreement and succeeded at trial and on the Defendant’s appeal in the County Court.  Whilst the Court of Appeal expressed regret in reaching its decision, it found for the Defendant on the basis that the consequences of failing to give notice of the right to cancel in the agreement are clear and the contract was unenforceable in law.  The Court of Appeal dismissed the Defendant’s appeal for the return of the £1,000.00 he had paid by way of deposit on the basis that the Defendant was not entitled to a refund under paragraph 10(1) of the 2008 Regulations and had not suggested any other legal basis upon which he was entitled to a refund.  The Court of Appeal expressed a hope that the Regulations would be amended to avoid such harsh consequences for removals companies, as they were often small businesses and needed to attend the customer’s house to assess the work required.  Further, they may have to incur costs and turn away work in the cancellation period (in the instant case, the agreement was entered into on 28.07.2011 and the Defendant’s move was scheduled for 05.08.2011).




Posted in Commercial, Costs, Private | No Comments »

January 19th, 2012

Interest on Costs

On 31.01.2012 the Court of Appeal will hear Simcoe v Jacuzzi UK Group plc, an appeal that will hopefully result in a judgment that ends the long-running debate over the date from which interest on legal costs runs.

Posted in Commercial, Costs | No Comments »

June 13th, 2011

Response of Three Costs Judges to the MOJ reforms

Here is a link to the joint response of Masters Haworth, Leonard and Campbell to the MOJ funding reforms: (Costs Judges’ Response May 2011)

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February 18th, 2011

Leel v FBC Manby Bowdler LLP [2011] EWHC 90200

The recent decision in Leel v FBC Manby Bowdler LLP [2011] EWHC 90200 (Costs) should be of interest to parties involved in solicitor and own client costs disputes and considers whether there were was an agreement to deliver interim statute bills and ‘special circumstances’ within the meaning of Section 70(3) of the Solicitors Act 1974 to allow an assessment to proceed out of time.

Posted in Costs | No Comments »

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