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Costs: Katherine Morgan v Spirit Group Ltd [2011] EWCA Civ 68

A judge, when undertaking an assessment of costs, must conduct either a summary assessment of costs or refer the costs to a detailed assessment.

It is not open to a judge to rely solely on CPR 44.3(6)(b), or any other ‘manifestation of his discretion’, to get around the usual process of assessment. 

M slipped in a nightclub owned by the Defendant, suffering a fractured wrist. Liability was admitted and the case was listed on the multi track and proceeded to a Trial on Quantum. General damages were sought in the sum of £9,000 to £10,000, and special damages in the sum of £31,092 odd. At trial, the Claimant was awarded £13,419. The Claimant’s solicitor (who was also her husband) produced a costs bill of £99,206 for the claim inclusive of 100% uplift for solicitor and counsel alike. 

The judge made an order that the Defendant ‘make a contribution’ of £25,000 to the Claimant’s costs. He did so on the basis that the claim should have been allocated to the Fast Track and as such assessment would be made in light of that fact. No summary assessment was undertaken. The Claimant appealed. 

The Appeal was allowed, in part. The Court of Appeal held that it was not open to the judge at first instance to simply rely upon his discretion in assessing costs. While the court had ‘much sympathy with the very practical…approach’ [27] taken by the judge, it was not an approach which was open to him to take. Although a judge’s discretion on assessing costs is ‘very wide’ and ‘a broad brush can, where appropriate, be used’ [27], a judge must conduct an item by item consideration of the individual elements of the bill by way of summary assessment or direct a detailed assessment. 

Allowing the appeal, the Court directed that the case be sent for a detailed assessment. Notably, however, it was also directed that the judge at first instance’s decision to assess the costs as if the case was on the Fast Track was within his powers and that approach should be followed at the subsequent costs hearing.

/ 1st Apr 2011


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