Assessment Of Itemised Bills-Whether Care and on Claimable– whether Cost Of Itemised Bill Claimable

Southwell v Jackson [2012] QDC 65

Costs- Solicitor And Client – Assessment Of Itemised Bills – Whether Whole Assessment Ought To Be Set Aside – When Retainer Terminated – Whether Care And Consideration Claimable – Whether Cost Of Itemised Bills Claimable

After an assessment of costs, the applicants applied for orders to give effect to the costs certificates filed in August 2011 in circumstances where the solicitor had, deducted the amounts of the itemised bills from monies held in trust, and where the certificates showed the costs assessed were significantly lower than the amounts in the itemised bills. In response the solicitor filed an application for review on 13 January 2012 but was not about to specify grounds as the assessor had not provided reasons. After the reasons became available on 15 February 2012 the respondent filed an amended application for review.

The Respondent argued that the costs assessments should be set aside in total on three grounds which were a breach by the costs assessor of his obligation under r719, there was a breach of natural justice from the costs assessor and omissions from the reasons.

Rule 719

The Respondent alleged that the assessor had a direct/ indirect interest in the costs assessment which could conflict with the proper performance of his duties due to a number of correspondences between the assessor and Legal Services Commission about the delay. The judge believed Rule 719 was concerned with a traditional conflict of interest where there is some association between the costs assessor and one of the parties or a firm of solicitors. It was the judge’s opinion that the fact one party was complaining about delay does not give the assessor even an indirect interest in the assessment.

Breach of Natural Justice

The respondent submitted there was a breach of natural justice for a number of reasons.

1) The delay in completing the assessments and filing the certificates. The Appellant court have

concerns that delay in delivering reserved judgements meant that by the time the judgement was

prepared the trial judge had an insufficient recollection of the details of the matter to be able to

resolve issues of credibility of witnesses or to deal with submissions made at trial. In this case there

were nothing in the reasons of the cost assessor which suggest these factors are applicable and as

such the mere fact of delay does not justify setting aside the outcome of the assessment.

2) The respondent also complained about secret communications between the applicants and the costs

assessor which should have been disclosed. The judge believed that there was not an obligation for

all communications to be disclosed to the other party where they only concerned mechanical

processes of the assessment. However, had the communications dealt with the substance of the

assessment then this must be disclosed to both parties giving them both an opportunity to respond.

The judge was provided with copies of the letters concerned and diary notes of telephone

attendances and it was clear that they only involved communication of mechanical issues.

3) It was also submitted that the costs assessor failed to take into account matters which should have

been taken into account, particularly submissions made by the respondent. This was due to the fact

that each statement of reasons prepared stated that material received as “itemised bill, applicant’s

objections, solicitors responses, solicitor file”. The judge was not persuaded that the assessor failed

to have regard to the further submissions by the respondent as they could have been included in the

term solicitor’s responses.

4) It was submitted that there was a failure on the part of the costs assessor to assess the costs as

required by s341(1) of the Act as the assessor had taken into account the consideration identified in

paragraph (c) when it did not apply due the presence of a costs agreement between the parties and

s340 of the Act applied. In the reasons the assessor used the expressions “amount was fair and

reasonable” and “amount was not fair and reasonable” which reflect the test in paragraph (c).

However, when the adjustments are examined it can be seen that the assessor meant the amount claimed was not calculated in accordance with the costs agreement. The judge decided that assessment had been property carried out and the fact that the reasons might have been better expressed is not a ground to set aside the certificates.

Omissions from the reasons

There were a number of omissions in the reasons which the judge stated upon examination of the itemised bill were obvious and the deficiencies in the reasons were not of such seriousness to justify otherwise interfering in the assessment. The judge also commented on if the assessor could take into account anything not raised in an objection. As the costs statements were being assessed under Part 4 of the Legal Professions Act, there are no sections which require the assessment process to be limited to matters specifically raised in a notice of objection. It is always open to the taxing officer to disallow or reduce an item if it was thought to be unjustified and under the Act the assessor is to have regard to all matters in the bill.

It was then submitted that the preparation of the certificate for bill 3 was incorrect. Upon review the judge found that there had been an obvious typing error in the certificate and that it was grounds for correcting the certificate but not any other relief.

Care and Consideration – Bill 1

The judge discussed where the agreement for retainer specifies that the solicitor will charge on a particular basis, if there is a right to charge on another basis. It seemed to the judge clear that the agreement provided an express and exhaustive statement of the basis upon which fees would be calculated and charged for work done by the firm. There was no provision in the agreement for any additional amount to be charged and it necessarily follows that the decision of the costs assessor that no charge could be made was correct.

Costs of Drawing itemised bill – Bill 1

A letter recorded that it was agreed that costs would be independently determined by a costs assessment. There was no express agreement on the part of the client to pay the costs of drawing the itemised bills. The judge believed the costs assessors decision to disallow the drawing of itemised bills to be charged was correct.

Termination of the retainer – Bill 2

A letter was sent from the current solicitors of the applicants to the respondent advising that instructions had been terminated and asking for the requirements to obtain the file. For termination of the retainer to be effective, it needed to be plainly expressed, something definite, clear and precise. In the judge’s opinion the letter was sufficiently clear and precise as to the applicant’s position. The assessor’s decision to disallow item 80 and the following 10 items was correct. The same point arose in relation to bill 3.

Care and Conduct – Bill 2

This bill was assessed according to the Supreme Court Scale where care and conduct can be charged. In the itemised bill over the amount was for more than 30% of the professional fees claimed. The assessor reduced this amount, allowing an amount of 20% of the reduced professional fees allowed on assessment. The judge believed the work was for the respondent to determine how she ought to act and that it may have been a novel and difficult point for her, but is generally not a point of any great novelty, difficulty or complexity.

Research Services – Bill 3

The judge believed that the costs agreement would not entitle the solicitor to charge the client for the process of finding out the sort of knowledge which a reasonably skilled and experienced solicitor should possess. If the judge considered an item to be something a solicitor doing that type of work ought to know, then the research would be characterised as self-education and disallowed by the assessor.