Best v Wellcome Foundation Ltd (No. 3)

• Jurisdiction: Ireland
• Judgment Date: 01 January 1996
• Date: 01 January 1996
• Docket Number: [1978 No. 2641P]
• Court: High Court

Best v. Wellcome Foundation Ltd. (No. 3)

Kenneth James Best (formerly an infant but now of full age, a person of unsound mind not so found), suing by his mother and next friend Margaret Best

Plaintiff

and

Wellcome Foundation Limited, Maurice O'Keefe, The Southern Health Board, The Minister for Health, Ireland and The Attorney General, Defendants (No. 3)

[1978 No. 2641P]

High Court

Practice - Costs - Taxation - Review - Solicitor's instruction fee - Criteria for assessment - Equivalent cases - Brief fee for counsel - Amount payable by reasonably prudent solicitor - Professional and legal cost accountant fees - Party and party costs - Special case - Rules of the Superior Courts, 1986 (S.I. No. 15), O. 99, r. 10, sub-r. 2, O. 12, sub-r. 2 (a), O. 37, sub-r. 22 (ii), Appendix W.

Order 99 of the Rules of the Superior Courts, 1986, provides for the entitlement to, and taxation of, costs.

Order 99, r. 10, sub-r. 2 provides that costs are to be taxed on a party and party basis and all costs are to be allowed which are necessary or proper for the attainment of justice or for enforcing or defending the rights of the party whose costs are being taxed.

Order 99, r. 12, sub-r. 2 provides that in respect of a taxation between a solicitor and client, and in other special cases, the Taxing Master may make a special allowance:—

(a) in relation to items not mentioned in the scale [set out at Appendix W of the Rules], or

(b) for an amount higher than that prescribed by the said scale."

Order 99, r. 37, sub-r. 22 (ii) sets out the criteria to be applied by the Taxing Master in exercising his discretion with regard to any item listed in the scale of costs set out in Appendix W of the Rules. In particular, he must have regard to:—

"(a) The complexity of the item or of the cause or matter in which it arises and the difficulty or novelty of the questions involved;

(b) the skill, specialised knowledge and responsibility required of, and the time and labour expended by, the solicitor;

(c) the number and importance of the documents (however brief) prepared or perused;

(d) the place and circumstances in which the business involved is transacted;

(e) the importance of the cause or matter to the client;

(f) where money or property is involved, its amount or value;

(g) any other fees and allowances payable to the solicitor in respect of other items in the same cause or matter but only where work done in relation to those items has reduced the work which would otherwise have been necessary in relation to the item in question."

The plaintiff settled his personal injuries action against the defendants for the sum of £2.75 million and an order was made for the taxation of costs in default of agreement. This settlement was effected following a ruling by the Supreme Court on the issue of liability in favour of the plaintiff and a direction that the matter be remitted to the High Court for the assessment of damages (see [1993] 3 I.R. 421). The settlement was reached on the third day of the remitted hearing, which had been expected to last up to six weeks. The costs of the substantive action dealing with the issue of liability were agreed between the parties. However, in relation to the costs of the subsequent trial and settlement as to damages, the parties were unable to agree and the matter went to taxation.

The Taxing Master ruled that the plaintiff should be allowed, inter alia, his costs in the sum of £400,000 for the solicitor's instruction fee, £140,000 for counsels' brief fee, £72,340.15 for professional fees relating to the provision of accommodation for the plaintiff, and £40,000 for the plaintiffs legal cost accountant. The first defendant sought a review of the Taxing Master's ruling in respect of these matters by the High Court.

Held by Barron J., in reducing the sums awarded by the Taxing Master, 1, that there was no doubt but that the facts giving rise to the original cause of action were unique and that the case was an extremely difficult one.

2. That, in assessing the appropriate level of damages to be awarded, the nature of the facts which had to be proved to establish liability was of limited relevance. The real difficulty in the case was the presentation of the consequences of the injuries and to show what those consequences meant in financial terms.

3. That in respect of the solicitor's instruction fee, and having regard to the provisions of O. 99, r. 37, sub-r. 22 (ii), there were effectively only three criteria to be considered:—

• (a) any special expertise of the solicitor;

• (b) the amount of work done by the solicitor;

• (c) the degree of responsibility borne by the solicitor,

and a solicitor should not be compensated under two separate headings for the same work.

4. That each of the witnesses giving evidence in respect of costs had been over-influenced by the amount of the settlement.

5. That it was both appropriate and correct, in assessing the level of instruction fee payable in the instant case, to compare it with other cases of a similar nature and complexity.

Crilly v. Farrington (Unreported, High Court, Denham J., 26th August, 1992) considered.

6. That, since the current jurisdiction of the Court was to determine the appropriate fee, earlier cases in which it was laid down that the court's function was dependent upon an error in principle having been made by the Taxing Master could no longer be regarded as authoritative.

7. That although Crilly v. Farrington (Unreported, High Court, Denham J., 26th August, 1992) was a more difficult case than the instant case, nevertheless something extra must be allowed for the larger settlement in the instant case. Taking the view that an appropriate instruction fee for a case such as Crilly v. Farrington would be in the region of £60,000, an appropriate fee for the instant case would be a sum of £75,000.

8. That in determining the appropriate brief fee for counsel it was necessary to consider what the hypothetical counsel competent to do the case and not being in a position to expect a special or fashionable fee would be prepared to accept as his brief fee.

Kelly v. Breen [1978] I.L.R.M. 63 applied.

9. That the brief fees sought in this respect should be allowed unless no solicitor acting reasonably carefully and reasonably prudently based on his experience in the course of his practice would have agreed to such fees.

Smyth v. Tunney [1993] 1 I.R. 451 and Crotty v. An Taoiseach (No. 2) [1990] I.L.R.M. 617 considered.

10. That although the instant case possessed unique difficulties and complexities it was not appropriate to base an assessment of the appropriate level of brief fee on the amount or nature of work done by counsel.

11. That an analysis of other cases revealed a current practice of marking fees as a percentage of the amount awarded or agreed.

12. That drawing on his experience from practice, and acting in a reasonably careful and prudent matter, no solicitor would have agreed to a fee of 50,000 guineas. A more appropriate fee would be 25,000 guineas with the same proportion of such fee as the proportion marked for junior counsel. No reasonably careful and prudent solicitor would offer more.

13. That much of what was claimed by way of professional fees was more properly described and accounted for as special damages. Insofar as special damages had already been paid over by the first defendant as part of the settlement sum, the costs claimed in respect thereof would be reduced accordingly.

14. That in respect of the fees claimed on behalf of the cost accountant who had drawn up the bill of costs, it could not be said that his services were necessary to do justice between the parties, or that the circumstances of the case gave rise to a particular need which could not have been anticipated, within the meaning of the Rules of the Superior Courts, 1986, O. 99, r. 10, sub-r. 2 and r. 12 (a). Although it was nowadays the normal practice to employ the services of a cost accountant in such matters this was a matter of choice for the solicitor. The liability of the other party could not be dependent upon how he made that choice.

O'Sullivan v. Hughes [1986] I.L.R.M. 555 and In re Castle Brand Lid.[1990] 1 I.R. 301 applied.

Obiter: That it was desirable, insofar as modem practice accepted the cost accountant as an integral part of the taxation of costs system, that the Rules of the Superior Courts should be amended to take account of this development.

Cases mentioned in this report:—

Aga Khan v. Firestone [1992] 1. L.R.M. 31.

In re Castle Brand Ltd. [1990] 1 I.R. 301; [1990] I.L.R.M. 97.

Charlton v. Northern Bank Finance Corporation [1979] I.R. 149.

Crilly v. Farrington (Unreported, High Court, Denham J., 26th August, 1992).

Crotty v. An Taoiseach (No. 2) [1990] I.L.R.M. 617.

Kelly v. Breen [1978] I.L.R.M. 63.

O'Sullivan v. Hughes [1986] I.L.R.M. 555.

Reddy v. Bates [1983] I.R. 141; [1984] I.L.R.M. 197.

Smyth v. Tunney [1993] 1 I.R. 451.

Review of taxation.

The facts have been summarised in the headnote and are set out in full in the judgment of Barron J., infra.

The motion to review taxation was brought by the first defendant by way of appeal from the ruling of the Taxing Master of the 8th December, 1993, on objections by the first defendant to his ruling of the 30th July, 1993. The review was heard by the High Court (Barron J.) on the 22nd, 24th and 25th March, and the 1st, 2nd and 3rd June, 1994.

Cur. adv. vult.

Barron J.

This matter comes before the Court by way of an appeal from the rulings of the Taxing Master made on the 8th December, 1993, in respect of objections brought in by the first defendant to his rulings dated the 30th July, 1993. There are four aspects of the taxation which are in contention:—

• (1) solicitor's instruction fee;

• (2) counsel's brief fee;

• (3) professional fees relating to the provision of accommodation for the plaintiff; and

• (4) the fee for a...