REF/2008/0305

The Adjudicator to Her majesty’s Land Registry
LAND Registration act 2002

IN the matter of a reference from hm land registry

BETWEEN

Frazer Abbott

APPLICANT

and

Helen Keeley

RESPONDENT

Property Address: 49 Wicks Green, Formby, Liverpool, L37 1PP
Title Number: LA172234

Before: Mr Martin Dray sitting as  to HM Land Registry

COSTS DECISION 

IN THE LIGHT OF the Order dated 12 September 2008 directing the Chief Land Registrar to give effect to the Applicant’s application for the entry of a restriction.

AND UPON the Applicant having applied for his costs of this reference.

AND FURTHER UPON the Applicant having submitted a Bill of Costs, the Respondent having submitted Points of Dispute and the Applicant having made submissions and representations in respect of costs in correspondence, all of which documentation has been considered by the Adjudicator.

IT IS ORDERED THAT:

1.	The Applicant’s costs of this reference are summarily assessed in the total sum of £3,525.00 (inclusive of VAT).

2.	The Respondent do pay the said sum of £3,525.00 to the Applicant by 2 July 2009.

REASONS:

Basic Entitlement
1.	The Adjudicator considers that, in view of the Applicant’s application having been given effect to, the Applicant is the successful party in this reference.  Therefore, the Applicant is in principle entitled to recover his costs from the Respondent.

CFA: in principle
2.	The Adjudicator determines that in principle the Applicant is entitled to recover the success fee under the Conditional Fee Agreement.  By sections 58 & 58A of the Courts and Legal Services Act 1990 (as substituted/inserted by the Access to Justice Act 1999), and the Conditional Fee Agreements Order 2000 (SI 2000/823), it is permissible for a party to enter into a CFA providing for a maximum success fee uplift of 100% with a person providing advocacy or litigation services – defined in section 119(1) of the 1990 Act as meaning any services which it would be reasonable to expect a person who is exercising, or contemplating exercising, a right of audience or (as the case may be) a right to conduct litigation in relation to any proceedings, or contemplated proceedings, to provide – in any sort of proceedings for resolving disputes (and not just proceedings in a court) (except for criminal and family proceedings).  This therefore undoubtedly includes proceedings before the Adjudicator (who is, incidentially, regarded as tribunal under the supervision of the Council on Tribunals – see the Tribunal and Inquiries Act 1992, Schedule 1, paragraph 27B – and hence is a “court” for the purposes of the 1990 Act).

3.	Further, so far as jurisdiction is concerned, section 58(6) of the 1990 Act provides that a costs order made in any proceedings may, subject in the case of court proceedings to rules of court, include provision requiring the payment of any fees payable under a conditional fee agreement which provides for a success fee.  Thus the starting point is that success fees are recoverable in principle, unless a specific procedural rule displaces this prima facie entitlement.  The Adjudicator to Her Majesty’s Land Registry (Practice and Procedure) Rules 2003 (SI 2003/2171) (as amended) are silent on the question of CFAs.  Recovery of success fees is neither expressly ruled in or out.  That being so, in the absence of any exclusion of the right to recover an uplift payable under a CFA, the Adjudicator accepts the Applicant’s contention that the success fee is allowable in principle.

CFA: in this case
4.	The Adjudicator considers that there is no merit in the Respondent’s suggestion that alternative methods of funding were not adequately explored by the Applicant.  First, the Conditional Fee Agreements Regulations 2000 (SI 2000/692) which (among other things) required specific consideration of alternative funding methods prior to entry into a CFA, were revoked with effect from 1 November 2005 by the Conditional Fee Agreements (Revocation) Regulations 2005 (SI 2005/2305).  Second, the Adjudicator accepts the point put forward by the Applicant’s Solicitors in their letter of 22 April 2009, namely that they made all necessary and reasonable enquiries into alternative methods of funding before the Applicant entered the CFA.  The Adjudicator has no reason to conclude otherwise and notes that the Respondent’s argument describes itself as founded on something which the Respondent “can only assume”.  This assumption is not proved.  For the sake of completeness, it is considered that the fact that one letter was sent by the Applicant to Capita Insurance (apparently on 21 May 2008, according to the Schedule accompanying the Applicant’s Solicitors’ letter of 19 September 2008) of itself in no way undermines or calls into question the preceding conclusion.  Further, the fact that legal aid was apparently explored by the Applicant in 2006 if anything counts in favour of, as opposed to against, the Applicant in this context.

5.	Further, although the Respondent refers to rule 2.03 of the Solicitors’ Code of Conduct, which governs information to be provided by a solicitor to his client, the Adjudicator has no grounds for finding that any breach of that rule has been committed.  Consequently, it is unnecessary to determine whether, had there been such a breach, it would have had ramifications so far as recovery of a success fee from the Respondent is concerned.

6.	In the circumstances the Adjudicator has no reason to conclude that the CFA, of which notice was apparently given to the Respondent’s solicitors in correspondence (according to the Applicants’ Solicitors’ letter of 19 September 2008) is unenforceable.  He thus rejects the Respondent’s contention that no success fee is recoverable.

CFA: level of success fee
7.	The Applicant was represented on a no win, no fee CFA basis with a 100% success fee which is claimed in the events which have happened.  The Respondent makes no specific representations on, or challenge to, the actual level of any success fee (besides denying the Applicant’s entitlement to any success fee at all), although it is said generally that there were no complex issues in this claim.

8.	The Adjudicator considers that the reasonableness of the success fee must be assessed in the light of what was known when the CFA was entered into.  The level of the success fee should be determined having regard to the litigation risks as they would have been objectively perceived by a reasonably careful solicitor at that stage.  The exercise thus entails use of forward-looking vision rather than hindsight.  So the fact that the Respondent later effectively capitulated (some time into the proceedings) is irrelevant, unless this was a particularly likely and foreseeable outcome at the outset.

9.	The Adjudicator takes into account the fact that, as the Respondent’s letter of objection dated 20 December 2007 makes clear, the dispute had a long history, dating back to autumn 2004.  Further, it is to be borne in mind that negotiations over the period between the onset of the dispute and the reference to the Adjudicator had not borne fruit; the parties’ positions were seemingly entrenched.  In addition, it is noted that the Respondent strongly objected to the Applicant’s application, asserting (among other things) that there was no proper claim and that, at most, there was a quantum meruit due which would not found any entitlement to a beneficial interest in the property.  In these circumstances the Adjudicator considers that (until the Respondent failed to pursue the objection and file a statement of case) there was no reason for the Applicant to believe that these proceedings would be anything other than hard-fought and contested.

10.	The Adjudicator does not overlook that the claim was not particularly complicated in legal terms.  However, he is of the view that so far as the underlying facts were concerned (on which the case would in turn hinge) the outcome would fairly have been regarded by any reasonable solicitor acting for the Applicant as far from certain.  Matters would turn (to a large extent at least) on one person’s word against that of another.  There would have been no reason to imagine that the Respondent did not believe that she had a winnable case.

11.	Weighing all the considerations, the Adjudicator determines that the 100% uplift, though arguably somewhat generous to the Applicant’s Solicitors, was nonetheless reasonable in the circumstances, given the very real risk that the claim might have failed.  The uplift is therefore allowed in full.

Base costs
General overview
12.	In the context of a summary assessment of costs it is unnecessary and inappropriate to go through the Bill of Costs line by line, item by item.  Instead, the proper course is to stand back and consider and assess the overall proportionality of the claim.  In this regard the Adjudicator bears in mind that by the time the reference was determined the Applicant had done little more than compile a short and relatively simple Statement of Case and list of documents.  Ignoring the CFA success fee, the base costs claimed for progressing the matter to that stage amount to some £2,518.43 exclusive of VAT.  In the light of the limited work which had been undertaken, and mindful of the fact that the Applicant’s case must surely have been explored when applying to HMLR for the restriction (i.e. before the reference to the Adjudicator), it is considered that a claim of such magnitude is neither reasonable nor proportionate.

13.	In the circumstances, taking account of all the specific points noted in paragraphs 15 to 25 below and mindful of the overall nature and extent of the work carried out, the Adjudicator summarily assesses the base costs in the sum of £1,500 plus VAT.

14.	Without in any way purporting to undertake a comprehensive review of each and every item of costs (as would be appropriate on a detailed assessment, an exercise which is certainly not proportionate in the context of this case), the Adjudicator deals with some of the more significant and substantial aspects of the costs claim and the various challenges thereto.

Specific observations
(1) Hourly Rate
15.	The hourly rate of £203 claimed by the Applicant (by way of concession from the originally sought £205) for a Grade A fee earner is considered to be reasonable.  It accords with the guideline rate for 2008 in respect of such a fee earner in a Liverpool-based firm of solicitors.  The argument that such rate is excessive in all the circumstances of the case is rejected.  The substantive claim was for a beneficial interest based on a common intention constructive trust and/or proprietary estoppel.  The engagement of a Grade A fee earner in respect of such a claim was entirely appropriate and the Applicant is entitled to recover fees commensurate with such engagement rather than the rate of £151 per hour advanced by the Respondent.

(2) File Attendance Notes
16.	The Respondent states that it must assume that the items claimed are supported by contemporaneous notes.  The Adjudicator has no reason to conclude otherwise.  The Respondent contends that any unrecorded time must be rejected. However, on the basis of the material before him the Adjudicator is satisfied that the charges claimed represent time and work that was actually spent/undertaken by the Applicant’s Solicitors.

(3) Various items on the Bill of Costs
17.	The Adjudicator has taken account of the points raised by the Respondent.  He considers that there is force in some, but not all, of them.

18.	He does not accept that the time spent in discussing the bundle of receipts and invoices (item 6) was excessive, although he bears in mind when considering item (19) below.  However, he considers that items (9) and (12) – correspondence with Capita Insurance and Litigation Recovery Services – are not matters in respect of which the Respondent, especially when faced with the CFA, should be expected to pick up the tab.  These are regarded as being unreasonable in the circumstances.

19.	Items (7) and (8) are believed to relate to communications with the Adjudicator, rather than the Land Registry itself (as stated on the Bill of Costs).  This inference is supported by the fact that items (20) to (22), (26) to (28) and (30) all refer to “HMLR” when plainly the context requires this to be read as the Adjudicator.  On this basis, items (7) and (8) are acceptable in principle.

20.	Items (10) and (11) concern liaison by the Applicant’s Solicitor with his client throughout the case.  It is considered that such liaison was both reasonable and appropriate.

21.	The Adjudicator agrees that the time spent on item (16) – consideration of the (standard) directions – was excessive.  He agrees with the Respondent that this should be reduced.

22.	Item (17) is regarded as reasonable.  1.2 hours for the preparation of a Statement of Case and list of documents is far from excessive.  The Respondent’s offer of 24 minutes is wholly unrealistic.

23.	Item (18) is accepted as reasonable.  Revisions to a draft Statement of Case following liaison with the client are not unreasonable.

24.	Item (19) is a claim for 1.9 hours of work in going through invoices and receipts and further amending the Statement of Case etc.  In the light of the work previously undertaken on the Statement of Case, and bearing in mind item (6) above, the Adjudicator believes that this is excessive.

25.	The Adjudicator considers that there is substance in several of the Respondent’s points of dispute as regards other items included in the Bill of Costs.  In particular, costs attributable to the amendment of the original Statement of Case (which did not comply with the relevant rules) and the provision of legible copies of the associated documentation are regarded as having been unreasonably incurred and/or as administrative work which should be treated as part of the firm’s overheads.  Further, the time spent on several other aspects of the case, particularly periodic file reviews, appears generally excessive.  In addition, the Adjudicator does not consider it reasonable or appropriate for the Respondent to recover costs incurred in reading and considering incoming correspondence.  

Overall conclusion
26.	Applying the 100% success fee, the net result is that the total costs which the Applicant is entitled to recover are £3,000 plus VAT.  Adding VAT at 17.5% (the rate as claimed and which prevailed in 2008 when the underlying costs were incurred, to which rate no objection is taken by the Respondent), the total payable is £3,525.

Dated this Thursday 18 June 2009

By Order of The Adjudicator to HM Land Registry