The appellant, Mrs Lampert, had compromised proceedings brought against her and her husband in the Chancery Division for possession of a property over which the respondents had a charge. The Tomlin Order provided for a split of the proceeds of sale 50/50 between the respondents and the appellant in the event that the sale achieved in excess of £800,000. Following the sale of the property for £1.225m, the respondents discovered that a side arrangement had been made whereby the appellant had apparently sold the furniture and fixtures for £65,000. The respondents commenced proceedings to claim half the value of the side sale together with the sum of £12,000 that the Tomlin Order provided was to be paid on account to them. They obtained judgment for £32,500 plus £12,000 as security for the costs of the application. The respondents’ costs for the original proceedings were assessed at £48,845 and those for the detailed assessment proceedings themselves at £32,181.44, a total of £81,026.44.
Mrs Lampert raised two issues on appeal: (1) that the costs of the respondents’ solicitors in relation to Mr Lampert’s dealings with the Office for the Supervision of Solicitors should not have been included within the scope of the detailed assessment; (2) that a costs award of £81,026.44 was disproportionate given that the dispute was over a sum of £32,500.

  

Reference

The appeal was allowed on the second ground because the deputy costs judge failed to apply the procedural requirements for dealing with the question of proportionality set out in the Court of Appeal decision Lownds vs Home Office (2002).

This decision set out: (1) a global approach to the assessment of costs that indicates whether the total sum claimed is or appears to be disproportionate, having particular regard to the considerations that CPR 44.5(3) states are relevant; followed by (2) an item-by-item approach to ascertain whether each item should have been reasonably incurred and that the cost for that item was reasonable. The decision would therefore be referred back to the same deputy costs judge to reconsider whether or not as a preliminary judgment proportionality was relevant. However, because the deputy costs judge had considered proportionality at the end of the detailed assessment at the suggestion of the appellant’s costs draftsman, the appellant was ordered to pay the costs of the appeal, on the grounds that she should not be able to create a procedural irregularity and then take advantage of it on appeal without a costs consequence visiting her.

On the second issue, the appeal was dismissed on the grounds that the appellant deliberately introduced the matters and therefore brought them into the forum of the assessment.

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Postscript

The deputy costs judge had declined to make any adjustment for proportionality on the grounds of the appellant’s unreasonable and intransigent conduct in the litigation. The appeal against his decision was successful on the grounds that he should have taken account of the conduct of the parties, and the other six factors identified in CPR 44.5(3), at the start of the assessment on the figures claimed. However, while the court emphasised the seriousness of departing from this procedure in the assessment of costs, it expressed little sympathy for the appellant whose own conduct – albeit partly through her representatives – had caused the costs to be so high and so created the grounds for the appeal. The respondents’ award of their costs of the appeal, despite the appellant’s success on one of the points raised, reflected this, as did the court’s refusal to remit the assessment to a different deputy costs judge. The Woolf Reforms, in the words of the deputy costs judge, do not anticipate people who seek to take on those they perceive have wronged them, irrespective of the consequences. Although the exact amount of the claimant’s recovery of its costs was not settled in this hearing, the court gave every indication that costs that were caused to be incurred by an unsuccessful litigant could be allowed on detailed assessment, even if they greatly exceeded the amounts in issue, if the proper procedure for assessing them was followed.