Tribe v South Down Gliding Club Ltd 12007 EWHC 900 80 (Costs) Master Gordon-Saker

This case concerned an estimate provided by a defendant at allocation questionnaire stage. The claimant discontinued and became obliged to pay the standard costs of the defendant who had provided the estimate. The Costs Judge directed himself by reference to paragraph 6.6 of 43 PD amended 2005. He held that the paying party had reasonably relied upon the receiving party's estimate. In particular, the paying party had not taken out further insurance cover against the possible liability for

higher costs.           The Costs Judge held that the receiving party had not given an

adequate explanation for the difference between the estimate and the bill. The Costs Judge did not hold the receiving party to the estimate or to such part of it as was appropriate for the period up until discontinuance as compared with the costs in the estimate being taken to trial. Instead the Costs Judge referred to Dyson LJ in Leigh v Michelin Tyre Plc, para 32 stating that the amount of the reduction was a matter for judgment of the court assessing the costs. The Costs Judge identified what he regarded as a reasonable figure for the receiving party for the entirety of the case (if there had not been a discontinuance). He then adjusted that total figure to

reflect the fact that the case had been discontinued. He added something for additional costs that had been identified and then he used the low estimate to place his assessment towards the lower end rather than the top end of the appropriate bracket for costs.

This is an example of a case where the paying party was able to show actual reliance on the estimate in a specific way.

 

Master Cigars Direct Ltd v Withers LLP [20071 EWHC 2733 (Ch) Morgan J

A Solicitors Act assessment.      Appeal to Morgan J from a preliminary issue heard before Master Rogers, the preliminary issue being as follows:

 

"For the avoidance of doubt the preliminary issue is intended to decide whether the Defendant's (Withers) revised estimate of 6 May 2005 is intended to cover:

(a)           only a four day trial;

(b)           any interlocutory applications that might be made by either side;

(c)           the number of expert witnesses;

(d)           the extent of the preparation necessitated by the above."

In the course of a lengthy judgment Morgan J reviewed the current state of the law with regard to estimates and in particular the relationship of Practice Rule 15 of the Solicitors Costs Information and Client Care Code 1999, Section 15 of the Supply of Goods and Services Act 1982, Leigh v Michelin Tyre Plc, Garbutt v Edwards, Wong v Vizards, Anthony v Ellis & Fairbairn and Tribe v South Down Gliding Club.

 

The Judge held that on a fair reading of the judgment below the Master had relied on a passage in Cook on Costs that stated that:

unless the client was notified that further sums were payable above the estimate, and preferably before they were incurred, the solicitor would be unable to recover costs in excess of the estimated amount.

He held that Cook was an incorrect statement of the law and insofar as the Master had relied on that passage he had been led into error. He also found the case for an implied term that the Solicitors Code of Conduct was incorporated into the solicitors retainer also failed. As such the appeal against the Master's ruling on the estimate was allowed. So far as a margin over and above the estimate was concerned the Judge did not regard the decision in Wong as laying down a general principle and declined to rule that the solicitors recovery would be capped by