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Ahmed v Powell, Supreme Courts Cost Office

4 March 2003
The issues

Costs Draftsmen – champerty – right of audience.

The facts

The Claimant had a claim for personal injuries following a road traffic accident. Insurers instructed NL Grant to act on their behalf in respect of costs. The Claimants raised issues in the costs proceedings relating to the right of the Costs Draftsman to address the Court and the nature of the instructions that were given. Points of Dispute had been signed by Beachcroft Wansbroughs who were acting for the Insurers. A letter was produced from Beachcrofts stating that they instructed N L Grant to attend when the matter came before the Deputy District Judge on Detailed Assessment. The Deputy District Judge also noted that there was no contractual relationship between Beachcrofts and NL Grant.

The decision

1. Rights of Audience

The reality of the situation was that the whole issue of costs was passed to NL Grant to deal with on the instructions of Cornhill. The normal process of lawyers advising the client and taking the client’s instructions and then delegating their function to a costs specialist was entirely absent. For the Court’s own protection, it was important that if Costs Draftsmen were to be instructed those instructions must come from the Solicitors who had themselves been properly instructed and who had to consider the claim for costs and advise the client. In no sense did NL Grant conduct the costs issue under instructions given by a qualified Litigator. Beachcrofts were not supplying any service to the Defendant, but were merely allowing the use of their name in the Detailed Assessment proceedings. It followed therefore that the representative of NL Grant had no right of audience.

2. Champerty

N L Grant were remunerated on the basis of a commission payable at a set rate provided that they achieved a monthly average gross saving of the given percentage on Claimant’s costs over a 12-month period for a guaranteed number of cases. In the event that the target was not met, NL Grant’s commission would be reduced to a lower percentage figure. The agreement was in effect a Contingency Fee Agreement. It was not caught however by Section 58 Courts and Legal Services Act 1990. It was not caught because that section applied only to Litigators and neither NL Grants nor the representative of NL Grants were Litigators.

3. The Master rejected the Defendant’s submissions that there was no threat to justice because the performance of the Costs Negotiators duties was subject to supervision of a qualified Litigator. That supervision was wholly illusory. Arrangements of this type gave rise to concerns that costs might be pursued over-vigorously and therefore disproportionately and in breach of the over-riding objective. The terms of agreement in this case were champertous.

Comments

To hear Master Hurst referring to the over-vigorous pursuance of costs issues is
somewhat ironic in the context of the constant message from the Judiciary that we are
all charging too much!

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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