CFB v AXA Insurance UK PLC [2025] EWHC 915 (SCCO) (15 April 2025)

(1) The Practice Note creates a heavy presumption against approval of a settlement between solicitor and client of the solicitors' claims for Deductions for Damages and such a presumption was wrong as a matter of law.

(2) This approach, said to have to adopted by the SCCO, is wrong. In serious and/or difficult traumatic brain injury ('TBI') claims (which he appeared to contend constituted a special category of litigation) there should be no heavy presumption against approval, approval should be dealt with as Mr Roy contends claims for damages are dealt with in the King's Bench Division (KB), by way of a "light touch" relying on the advice of counsel.

(3) The procedure which Mr Roy understands the SCCO to adopt in conducting an assessment was unfair as in general it involved an assessment without Points of Dispute, which is wrong as a matter of law. Further, it is wrong for a judge to raise issues on a bill. This gives rise to a serious procedural irregularity because the judge is entering into the 'arena' and the process ceased to be adversarial, as it should be.

(4) The statement in the Practice Note that the starting point for the costs of a Deduction from Damages assessment was no order for costs is wrong; if the judge requires an assessment of the costs this would require the payment of a court fee. It would be seriously unfair to solicitors who wanted to pursue a shortfall that they should have to pay such a fee.

Mr Roy was generally critical of what he perceived to be a reluctance on the part of the court (the SCCO in particular) to facilitate the payment of shortfall claims [8].

Cases involving TBI are, he argues, liable by their very nature to generate client care work which means that there will be costs which are reasonable on a solicitor client basis even if unreasonable inter partes (i.e. between the parties in the substantive claim). He says there is an understandable desire on the part of solicitors who have acted for clients to be paid these shortfall costs over and above those that have been recovered by defendants. An expectation that court fees are payable on assessment and that no order as to costs will be made in the solicitor's favour creates a 'lose -lose' scenario and imposes an unfair "tax" on the solicitors.

I had understood it to be suggested that the court fees payable on an assessment of Deductions from Damages should be recoverable from the Claimant - albeit that there was a reluctance on the part of Mr Roy to frame the issue in quite this way. I also understood it to be suggested that if I were to order an assessment consideration should be given to the appoint a legal representative to act for the protected party and prepare Points of Dispute- and that matter be dealt with as a section 70 Solicitors Act 1974 assessment, applying the statutory rule for costs recovery [9]. In any event, the corollary of his submissions for current purposes appeared to be that I should adopt a procedure that was, he submitted, fairer to a solicitor and this required me to take a "light touch" approach to the approval of the Deduction from Damages in TBI cases without any need to consider the merits too closely; indeed, I should not question in any detail or in any substantial way the views of Mr Roy, which I should trust. This would, he says, mitigate the unfair features which he has identified.

The need to have regard to the countervailing interest of the protected party on any deduction from their damages albeit recognised by Mr. Roy did not at least at first blush feature as prominently in his submission as might have been expected. It seems to me there might be serious consequence for protected parties if solicitors were to receive payments from damages without proper scrutiny. At the risk of stating the obvious, damages are generally paid to compensate parties for their losses. General Damages were increased to allow for payment of success fees, following LASPO (which largely ended the recovery of additional liabilities -success fees an the costs ATE premiums- defendants in most personal injury litigation) but there was no corresponding increase in awards to cover shortfall claims. If large sums are paid out of damages it might in some cases affect the ability of a protected party to fund care. This is perhaps particularly so where compensation is not full (as here) because the risks of liability or (possible) contributory negligence have reduced the level of damages that might otherwise be payable. Further, it might said that, although in this case the claim is relatively modest, claims for shortfall costs may be in the hundreds of thousands of pounds.

Indeed the submission of Mr. Roy appeared to borrow from the submissions of FOCIS which have been advanced in pursuit a change in the law. FOCIS argues that the current system is unfair so that solicitors handling complex claims are not adequately rewarded. However Mr Roy's argument is not that a rule change is required: his solution to his alleged problem was as I have indicated for a "light touch" approach.

In any event, whatever concerns or interests there might be, the correct approach to these issues is a matter of law and to my mind the correct approach is clear and apparent from the rules. Whilst recognising the very considerable industry of Mr Roy, I think my conclusions as to his criticisms at least of the Practice Note can be stated fairly shortly. However first I turn to the rules.

Relevant rules

CPR 21.10 provides that, where a claim is made on behalf of a child or protected party, no settlement, compromise or payment in respect of that claim shall be valid without the approval of the court. Since a claim for payment of costs is "a claim" any compromise of the therefore needs to be approved by the court.

CPR 46.4 provides, so far as material (my emphasis):

Costs where money is payable by or to a child or protected party

(1) This rule applies to any proceedings where a party is a child or protected party and –

(a) money is ordered or agreed to be paid to, or for the benefit of, that party; or

(b) money is ordered to be paid by that party or on that party's behalf.

('Child' and 'protected party' have the same meaning as in rule 21.1(2).)

(2) The general rule is that –

(a) the court must order a detailed assessment of the costs payable by, or out of money belonging to, any party who is a child or protected party; and

...

(3) The court need not order detailed assessment of costs in the circumstances set out in paragraph (5) or in Practice Direction 46.

(4) Where –

(a) a claimant is a child or protected party; and

(b) a detailed assessment has taken place under paragraph (2)(a),

the only amount payable by the child or protected party is the amount which the court certifies as payable.

(5) Where the costs payable comprise only the success fee claimed by the child's or protected party's legal representative under a conditional fee agreement or the balance of any payment under a damages based agreement, the court may direct that—

(a) the assessment procedure referred to in rule 46.10 and paragraph 6 of Practice Direction 46 shall not apply; and

(b) such costs be assessed summarily.

(This rule applies to a counterclaim by or on behalf of a child or protected party by virtue of rule 20.3.)

There is thus a general requirement that the court carry out a detailed assessment of claims for costs against a protected party. This requirement is however subject to exceptions. One exception is where the payment of costs is limited to a success fee. Claims for such fees can dealt with made by way of application under CPR 46.4(5). Pursuant to rule 46.4 the other exceptions are found in Costs Practice Direction 46 which provides at paragraph 2.1 as follows (again my emphasis):

The circumstances in which the court need not order the detailed assessment of costs under rule 46.4(2) are as follows –

(a) where there is no need to do so to protect the interests of the child or protected party or their estate;

(b) where another party has agreed to pay a specified sum in respect of the costs of the child or protected party and the legal representative acting for the child or protected party has waived the right to claim further costs;

(c) where the court has decided the costs payable to the child or protected party by way of summary assessment and the legal representative acting for the child or protected party has waived the right to claim further costs;

(d) where an insurer or other person is liable to discharge the costs which the child or protected party would otherwise be liable to pay to the legal representative and the court is satisfied that the insurer or other person is financially able to discharge those costs; and

...

It is clear from these provision and not in dispute that when considering the claims made by solicitors from damages the court is required to have in mind the interest of a child or a protected party and that the purpose of r.21.10 is to impose an external check on the propriety of settlement (see Dunhill v Burgin [2014] UKSC 18 in the context of a claim for damages).

The Practice Note

The obvious purpose of the Practice Note is to set out the procedure to be followed in the Senior Courts Costs Office where the court has awarded costs to a child or a protected party and the parties have subsequently reached agreement as to the amount to be paid by the paying party (normally, the Defendant). It appends a significant number of draft precedent orders which deal with the different claims that can be made.

The background to the Note was that in general before LASPO [10], and the ending of the recovery inter partes of success fees and ATE insurance premiums, claims for costs were not generally made against children and protected parties by their legal representatives over and above the sums recovered from a defendant. Such claims were, in general, waived. Plainly shortfall claims could in law have be made before LASPO but were not, as I understand, generally made where the claimant had the benefit of an inter partes costs orders. It is only more recently, after LASPO, that shortfall claims have been made for the recovery from damages of base costs, in addition to what are now the claims for success fees and ATE premiums which cannot be recovered from defendants..

The following paragraphs of the Practice Note seem to me relevant to Mr Roy's contentions (my emphasis):

8. Ordinarily the Court approving settlement of the claim (or awarding damages) will have incorporated in its costs order either provision for the detailed assessment of any costs claimed by the child or protected party's representatives, or will have dispensed with detailed assessment on one or more of the grounds provided for at Practice Direction 46, paragraph 2.1.

9. If the costs order does not dispense with detailed assessment as between the child or protected party and their legal representatives, then it may provide for detailed assessment subsequently to be dispensed with if the criteria set by Practice Direction 46 at paragraph 2.1 are met.

10. Where the court has ordered detailed assessment, the costs payable by the paying party have subsequently been agreed and the child or protected party's legal representatives have waived any further claim to costs, the costs settlement with the paying party can be approved under CPR 21.10. Application to the SCCO for approval should be made under CPR 23. Appendix 1 to this practice note is a model form of approval order based on waiver.

11. Where the criteria set by Practice Direction 46 at paragraph 2.1 are not met but the child or protected party's representatives seek payment only of a CFA success fee or the balance payable under a DBA (and summary assessment is not precluded by CPR 21.12(1A)), application to the SCCO may be made under CPR 23 for a summary assessment under CPR 46.4(5). Appendix 2 to this practice note is a model form of summary assessment order.

12. Applications for orders that the court "approves" or "certifies" the payment of costs by a child or protected party to their legal representatives are unlikely to be appropriate. If the legal representatives wish to dispense with detailed assessment on one or more of the grounds set out in paragraph 2.1 of Practice Direction 47 (other than waiver of any further claim to costs) they should make an application specifying the grounds relied on. The application must be supported by evidence.

13. Otherwise a request for a detailed assessment hearing must be filed in form N258 and a hearing fee paid by reference to Schedule 1, paragraph 5.2 of the Civil Proceedings Fees Order 2008.

......

16. The assessing judge is likely to take as a starting point that the hearing has been arranged for the benefit of the legal representatives and that it is not incumbent upon the child or protected party to bear the attendant costs.

17. For that reason, unless the child or protected party's litigation friend or Court of Protection deputy takes issue with the costs sought by the legal representatives and participates in the detailed assessment of those costs, the court is likely to make no order as to the costs of the detailed assessment process beyond any figure agreed with the paying party

(i) A Heavy Presumption?

Mr. Roy is clearly correct to say the Note is no higher in status than a Practice Direction and such directions do not have any no legal force. Accordingly the Note lacks any legal force.

Costs PD46 is at least primarily directed at the court dealing with the substantive claim for damages, not the assessing court. The rules are clear. It is for the court to order a detailed assessment under r 46.4 unless one of the exceptions is made out. Very often solicitors waive any shortfall and simply claim a success fee which might be deal with on application with the costs of an ATE premium - so that an assessment under r 46.4 can be dispensed with. The issue as to whether an assessment can be dispensed will in general have been made by the court dealing with the substantive claim. But if this court has not addressed this matter (in its order), as it has not in the case, and the solicitors are seeking to make a Deduction from Damages then the assessing court will have to decide whether it is in the interest of the protected party or child to dispense with detailed assessment (in accordance with subrule 46 2.1 (a)). The Practice Note does not to my mind do more than reflect the relevant procedural rule. It does not on any proper reading purport to do anything else.

To my mind this criticism is misconceived. There is no heavy presumption against approval. The background to the Practice Note was that solicitors were coming to court asking for to approve very often large payments from the damages awarded to be protected parties without properly addressing the terms of r 46.4. The Practice Note is intended to direct a practitioner to the requirements of the rule.

(ii) Proper approach to approval of claims for deductions from damages (in TBI claims)

Mr Roy's case is that the court should simply ascertain whether or not the proposed deduction is within a reasonable range. That, he says, is all the court does when approving substantive claims for damages by protected parties. He says that in the context of a claim for damages, the court typically adopts a "light touch" approach consistent, he says, with providing an external check. As I understood his contention was that in general when dealing with damages claims the court will rely upon the advice of counsel without scrutinising the matter any further and that is what should happen here. In this case I should "tailor my approach to mitigate the potentially problematic aspects of the Practice Note". Because damages for TBI were liable to generate irrecoverable costs and there should, if anything, be a presumption in favour of accepting at least a significant solicitor/client costs which the court should accept without scrutiny of the claim in the individual case.

In support of this contention, Mr Smith's evidence (following some discussion, it appears, with practitioners acting for catastrophically injured parties) is that historically the SCCO adopted a more flexible and light touch approach which he said was convergent with the approach to approvals to damages claim. There is nothing, in his view, to suggest that this did not work satisfactorily; Mr Smith's evidence is that it did.

It is not I think necessary to deal with all the various elements of the arguments Mr. Roy developed. As to Mr. Smith's stated experience of previous applications, and whatever the accuracy of his description as to what my have happened on cases before the Practice Note, I am not persuaded that it helps as to the proper interpretation of the rules. On this point, what other costs judges may or may not have done in other cases is irrelevant. Indeed whether it is appropriate for a solicitor or to give evidence of judicial practice in this way seems to me to me to be at best questionable -and the evidence is quite probably inadmissible. In any event to my mind the proposition which it seeks to support, that the court should simply accept counsel's advice, without analysing it in some measure, is not consistent with the rules.

Necessarily the degree of consideration by a judge in deciding whether any settlement is in the best interests of protected party will depend on the facts of each case. It is clearly in the interests of a claimant that finality is achieved at an early stage- indeed there may be problems if the Court were to be too fastidious about this process. I would accept, of course, that a court must be wary before rejecting what might in due course prove to be a sensible settlement and should be wary that arguments about small sums which do not really matter are not likely to in anybody's interest. But the requirement that the court must be satisfied that that it is in the interests of the protected party to dispense with an assessment is not subject to any qualification.

Part of the problem with Mr. Roy's submissions as I see it, is that they do not recognise the problem to which the rules are directed. In respect of claims for damages, particularly those pursued on a CFA, there is a real possibility of conflict of interest between the solicitor and the client (the solicitors are paid their costs if success is achieved and are less directly interested in the amount recovered- this conflict giving rise to a risk of under compensation) - however this problem is mitigated in part by the advice of counsel. In respect of a shortfall claim the conflict of interest between the solicitors and the client is obvious.

In this context I see no mandate in the rules for the "light touch" approach which Mr. Roy says applies to the approval of deductions from damages. Nor, for what it is worth, is that my experience of what happens in the KB [11] . The judge should be provided with relevant documents CPR 21.10 (3) - albeit not necessarily all the medical notes for instance. Counsel's advice may form a guide as to how any issue arising in the case may be resolved. But the mere requirement that the judge be provided with such an advice (CPR 21.10 (3) (h)) does not mean that the judge is bound to accept it. Typically the advice of counsel will set out the anticipated arguments of the parties on the issues arising. Counsel does not simply say that the settlement proposed is a good one and on this basis the court should approve it. The judge will consider the merits of the settlement and form their own view as to the merits. In some case (indeed not infrequently) a judge requires further explanation as to why a particular compromise is in the protected party's best interests; and in some cases the proposed settlement is not approved.

Mr. Roy went on to say that a litigation friend should be presumed capable of making sensible decisions in the protected party's interest and any other approach would, he says, be "paternalistic verging on patronising". Due weight must be given to the litigation friend's decision before ordering a detailed assessment (which he suggests amounts to a quasi trial). That would, he says, happen in the context of a claim for damages. It is not, he says, inherently more difficult for a litigation friend to understand the issues giving rise to costs settlement than issues such multipliers in a complex personal injury claim (multipliers, discount rates, periodical payments, etc-see too FOCIS' submissions on this point).

However whilst the consent of the litigation friend to a deduction, is relevant it is not decisive. The suggestion that the court must give due weight to the litigation friend's decision begs the question as to what is meant by "due weight". The wishes of the family are, where appropriate, taken into account and it is not in a protected party's interests that there be protracted delay in the resolution of a claim. Mr. Roy's comparison of claims for personal injury damages with costs claims however misses the point. In general litigation friends, who are, of course, normally responsible adult members of the protected party's family, have little or no qualifications or experience in dealing with either personal injury claims or costs. In damages claims the litigation friend will be guided by the advice of counsel or a solicitor in anything other than the simplest of cases. In costs claims I think it will be rare for a litigation friend to have any real appreciation as to whether costs are reasonable in the context of large personal injury claims: in general, they will simply trust their solicitors to claim only a reasonable amount. It is not necessary for me to go into the elaborate argument put by Mr. Roy to the effect that position was an analogous to a patient giving consent for surgery, quite obviously whatever the parallels it does not mean that the court should not look into the substance of the claim. What litigation friends do not generally have is the experience or expertise to decide whether a detailed assessment of the solicitors' costs is in the interests of the protected party and there is, as is obvious a plain conflict of interest with the solicitor in respect of the solicitor's claim costs. Indeed it strikes me that a court must be astute to the possibility that a litigation friend may be keen to approve the deduction from damages as it may relieve them from their own personal liability for the costs [12].

In any event it is plain that the court would not be making a decision in the best interests of the protected party if it simply deferred to the views of the litigation friend. There have been quite a number decisions of Costs Judges in which it was not accepted that the litigant friend's consent was determinative. I refer to my own decision in BCX v DTA [2021] 12 WLUK 234 as to the time spent by the solicitors in dealing with what is called rehabilitation, typically attendance at multidisciplinary (MDT) meetings. I reduced this claim substantially [13]. The litigation friend cannot be expected to know when work done by a solicitor is reasonable and scrutiny of this work is necessary, otherwise a solicitor would quite cynically run up a large bill for costs for work which is not progressive and wholly unreasonable. I do not accept that this decision and other such decision were "patronising" or wrong. Indeed other decisions by other costs judges indicate the need for court involvement (in JXC v NIS [2023] EWHC 1000 SCCO[1] Costs Judge Leonard was concerned a claim made by solicitors for cost claim by a solicitors against protected parties in excess of the costs budget in circumstances where the solicitors had not kept the litigation friend properly informed of costs budgets- and see too more recently perhaps AKS v NFU [2025] SWHC 125 (SCCO)[14]).

Mr. Roy says on behalf of the Claimant that he is independent counsel and that this independence should provide me with appropriate reassurance. But again counsel will generally acting on the instructions of the solicitors and may have an interest in a particular outcome. I mean no slight to Mr. Roy but it is plain that there are large sums of money to be gained if ultimately decisions were made to order a deduction by way of "light touch" on the part of the court and reliance, in the way suggested, on counsel's advice. The fundamental difficulty is however that the court needs to be satisfied that the proposed settlement is in the interests of the protected party and to my mind that requires the court to consider the merits of the proposed claim against the protected party. This cannot be delegated to counsel.

I have some considerable concerns about Mr. Smith's stated reliance on Mr Roy's advice by reasons of his judicial appointment as Deputy Costs Judge. Mr. Roy is leading counsel with experience of dealing with costs issues. However in my judgment it is not enough that counsel simply says that the sums looks reasonable, whatever their status or experience. There is generally no need for an advice (which might be protected by privilege). It is the content of the submission to the court that is important not the status of the person who provides it. Whatever the practice before the Practice Note, it is plain that the Note aims to ensure that the court has a skeleton argument which deals with the merits of the solicitor's costs claim and the sorts of concerns which commonly arise in assessment whether on the standard or indemnity basis. They are of the sorts of possible objections or concerns that I have set out in the appendix to this judgment.

I do not accept the contention that costs payable on a indemnity basis are bound to be significantly higher than costs of the standard basis and this should account for the shortfall claimed. An assessment between solicitor and client is not simply the determination of a sum due under a contract [15]: it requires a consideration of the reasonableness of the costs claimed. The same sorts of issues which arise inter partes assessment often arise in a solicitor/client assessment (lack of delegation, multi fee earner attendance, excessive time etc). Moreover in a solicitor/client assessment, the court is required to apply the presumptions in CPR 46.9 (3)[16] in deciding whether the costs claimed by the solicitor are reasonable. Approval or agreement to elements of costs creates a presumption of reasonableness only if approval or agreement is informed (see McDougall v Boote Edge Esterkin [2001] 1 Costs LR 118 and Herbert v HH Law Ltd [2019] EWCA Civ 527 [37] and [38]). There will moreover be a presumption that costs as between the solicitor and client are unreasonable if the costs are unusual in nature or amount and the solicitor did not tell the client that as a result the costs might not be recovered from the other party.

The presumptions under CPR 46.9 (3) are important in considering whether the particular costs sum claimed in this case are reasonable but are also relevant to the question as to whether as a matter of generality the indemnity basis will necessarily result in a higher recovery than a standard basis assessment. As the former Senior Costs Judge Gordon-Saker explained in ST v ZY [2022] EWHC B6,

"To avoid the presumption the solicitor is required to explain to the client that the costs may not be recovered because they were unusual. "Unusual" must therefore be read in the context of a between the parties assessment.

The judge went to on to explain that the provisions are not concerned with costs which are merely "unreasonable": a solicitor is not required to inform the client that particular costs may not be recovered because a court may conclude that they were not reasonably incurred or reasonable in amount. But it is clear that these presumptions provides some protection to a client against a claim by solicitor in circumstances where the client does not recover all their costs of the other side to the litigation. These protections arise as a matter of substantive law and are based on long standing principles of consumer protection [17].

Indeed whilst it may well be that costs awarded on the indemnity basis are often assessed as higher costs on a standard basis this does not necessarily follow from the rules (see CPR 44.3 (2) and (3)). Consideration of proportionality may limit the recovery of costs on a standard basis and not on an indemnity basis but this may not be a substantial factor in high value claims. Doubt will be exercised in a paying party' favour on a standard basis, whereas it exercised in the solicitor's favour on an indemnity basis- nevertheless, a judge may have little doubt in a assessment as to what is a reasonable level of cost for a particular piece of work. As the more experienced costs lawyers and costs draftsman will readily acknowledge there is no necessary difference in the assessment of what is reasonable under the two bases. In the circumstances I am not sure it follows from the rules that there must be a shortfall of any particular amount; each case is to be dealt with on its own merits.

Nor am I satisfied that in TBI cases there is an inherent likelihood that there will be significant reasonable costs which are not recovered inter partes but that are recoverable between solicitor and client. It may well be some time is taken up emotional support of a pastoral nature, as Mr. Roy put it, but vulnerability is a factor to be take under CPR 44.3(5) in determining inter partes costs on the standard basis. So allowance has to be made for the greater demands on solicitors when conducting cases for protected party and other vulnerable parties, both when costs budgeting and assessing costs. As with the determination of damages in personal injury claims, a defendant has to take their victim as they find them. In the circumstances I do not think I should simply assume that there are large number of attendances and of work for which could not recovered from the other side because a case involves TBI.

(iii) Unfair Process

Mr. Roy contends that it is extremely difficult, if not impossible, to conduct any detailed assessment in a fair or satisfactory manner in accordance with the Practice Note. Points of Dispute are obligatory under the rules and the Practice Note does not provide for these. This, he says, is a very serious problem; the court cannot draft them. They are prerequisite to a fair assessment, citing Ainsworth v Stewarts Law LLP [2020] EWCA Civ [178].The court is not in any event equipped to draft Points of Dispute. These can only properly done by an opponent/client challenging a bill. Moreover, for the court even to attempt to do so would require enormous judicial time to the detriment of other court users.

Mr. Roy is in my judgment wrong to describe Points of Dispute as mandatory: the ordinary direction for Points of Dispute in a solicitors/client assessment is subject to any other order the Court may make (see CPR 46.10). The assessment has to be fair (and the solicitor must have adequate notice of any possible objection of costs and an adequate chance to deal with it) but there are no compulsory directions for a solicitor/client assessment, as r 46.10 makes clear. The rules provide that the court must approve any settlement and any deduction from damages. If a court is not satisfied that the proposed arrangements are in the protected party's interests, it is (as a matter of trite law) required to explain why, and it follows that that the court must enable those concerns to be addressed in a detailed assessment. The primary legislation thus clearly provides for an independent assessment of a solicitor's costs with no input from the client at all. PD 46.8, consistently with that, disapplies the default cost certificate provisions of CPR 47. Detailed assessment has proceeded on this basis in the SCCO for many years now.

It seems to me that so long at the solicitors are put on notice any objections and has an opportunity to deal with them then fairness can be achieved.An assessment is, after all, not a trial or a quasi trial –it is generally a relatively flexible process which involves a consideration of the papers without witness statements or oral evidence.

Indeed, the absence of Points of Dispute is not an unusual aspect of costs assessment. Following the last hearing I drew Mr. Roy's attention to the following provisions/practices: detailed assessment in cases of public funding (a 'legal aid assessment') -CPR 47.18; detailed assessment of costs payable out of funds - CPR 47.19 (these are generally cases where there are beneficiaries of a fund who are liable to be affected by payment of costs; and the practice of Costs Judges, Deputy Costs Judges and Costs Officers assessing costs claimed by deputies under costs orders in the Court of Protection. All are instances where the court is required to carry out an assessment (normally initially provisionally) without Points of Dispute. Until recent rules changes (in 2024) the same applied to the costs in the Supreme Court, where no Points of Dispute have been served (see Section 9.1 Practice Direction 13 in the Supreme Court)[18]- a process which continues for cases which are not caught by the new rules. Costs Judges are, in these instances, expected to form a view as to the reasonableness of costs without Points of Dispute.

The court in Ainsworth was plainly addressing different circumstances where a party with capacity had ignored warnings given that its Points of Dispute were defective. The decision in that case was not directed to the situation here.

In practice in these claims Points of Dispute have often been prepared by a defendant in the substantive claim. Although they prepared for an inter partes assessment they can often stand as Points of Dispute for consideration in respect of the solicitors' claim for a Deduction (acknowledging that there can often be a different basis for assessment).

Indeed when dealing with shortfall claims where possible I have sought to give some consideration to the merits of the claim at or prior to directions hearing and have set out my concerns in any order listing the matter for assessment. I have generally invited the representative for the solicitor to specify whether there are any particular work in the litigation which costs which could not be recovered from the defendant (there may well, for instance, be good grounds for claiming the costs associated with medical report obtained by the solicitors on the litigation friends instructions but which could be relied upon [19]); I would expect that such costs can readily identified as there may be a good basis concluding that a more lengthy detailed assessment is not required if that is how the claim is put and the costs are otherwise reasonable). I have offered (as I indicate above) to carry out any assessment provisionally and on the papers in order to avoid a hearing but giving the solicitors the option to request for an adjustment of my allowance if they consider it inadequate[20]. The concerns set out in the order made at a directions hearing puts the solicitor on notice of the matters that need to be addressed at the hearing. Mr. Roy was critical of the procedure of setting out concerns in this way which he referred to as a procedure involving " Quasi-PoDs or the like (the suggestion here is a broad non-exhaustive list of concerns)". To my mind these procedures ensure that the solicitors know the case they have to meet, and have an opportunity to meet it. If solicitors are taken by surprise by any concern arising the issue can be put back in the assessment (as happens in ordinary assessment without any real difficulty).

Mr. Roy suggested that I could order the protected party or litigation friend to serve compliant Points of Dispute (alternatively the court appoint (and pay for) independent lawyers to do so), with what Mr. Roy referred were the "normal consequences" if they fail to do so [21]. However as I see it there is no clear mandate in the rules (or indeed jurisdiction for this). There is no procedure for default costs certificates and no reason for the court not to assess the reasonableness of the costs in the particular circumstances of these cases. Rather obviously this could have the effect of enabling solicitors to obtain payment without court scrutiny. Accordingly I reject Mr Roy's case on this point.

Further, I do not accept Mr. Roy's criticism to the effect that the court is putting itself in a position whereby it is or has the appearance of being biased. Nor does the judge adopt an adversarial mindset. The fact that one party in the assessment or potential assessment is a protected party and/or is unrepresented is just an ordinary incident of litigation. It should not afford the party that is represented any advantage.

Dealing with an unrepresented party may mean more involvement is required from the court to ensure the case is dealt with properly (i.e. in accordance with the law) but to my mind that does not intrinsically involve the judge acting outside their role and acting as an advocate or getting into the 'arena' as it was put. As I have said (and as is well known) the court is required to assess (generally provisionally) other bills without Points of Dispute in various circumstances as I have indicated above. Indeed claims by solicitors against protected parties and children for success fees are routinely summarily assessed by district judges on application without the need for the protected party to be represented to draft Points of Dispute. There is nothing unusual in a process that involves a court setting out objections to costs without a party having first raised them. That is the task of the judge on these claims and as Judge Leonard commented in JXC at [15] that process does not compromise the independence of the judge. It follows that from the very task that the court is asked to undertake when it is unable to approve a settlement, is to ask the solicitors to justify their claims. In doing so, it has to state the reasons for rejecting the compromise (as the court would do if it were rejecting a compromise of a claim for damages).

I accept that it would be inappropriate for a judge who has considered material (offers, counsel's advice) which is privileged or without prejudice in respect of the claim for Deduction from Damages to then carry out the detailed assessment. But deductions can be decided on an open skeleton argument justifying the reasonableness of the costs. Indeed the advice provided here at least appears to be open as between the Claimant and PE. Plainly there cannot be any problem considering the privileged material generated in the underlying claim; any privilege is that of the Claimant and does not protect the material from disclosure as between parties to a solicitor -client assessment or to the court.

I accept of course that this process can be demanding on court time. But that is not a sufficient basis for adopting a different procedure. Mr. Roy's suggestion that all difficulties can be avoided if I were to take a "light touch" approach essentially relying on counsel's advice is, to my mind, plainly not an acceptable one. It might help the process if the protected party had fully independent advice and this were provided to the court. However merely because the current system may be improved does not mean that it is defective.

Accordingly I reject Mr. Roy's contentions on this further point, and reject his ancillary point that that I should order the protected party to file Points of Dispute.

(iv) Costs of the assessment

Mr. Roy argues that the Practice Note will inevitably result in the solicitor, after accounting for their costs of the assessment, receiving a level of remuneration below what is reasonable. The bill as assessed will reflect a reasonable level of remuneration. But the solicitor will then have to deduct from this the considerable costs of the assessment (which is said to include an assessment fee or £4,980) The net remuneration will therefore below the reasonable figure as assessed. That the solicitor should not be compensated for the costs of the process of assessment was, he says, difficult to reconcile with article 1, protocol 1 right under ECHR.

On one level this appeared to be a complaint about the payment of court fees. That is a matter for the courts service (HMCTS). The fees payable are determined by reference to the criteria set out in on the relevant rules. They are not matters of discretion for the costs judge however compelling the case against the payment of a fee at the level suggested might appear.

There is no current application for costs for me to adjudicate on and since the Practice Note does not have the force of law and in any event only indicates no order as to costs as the starting point where the deduction from damages is not actively contested, it is not I think necessary for me to address this point any further. It is no part of my role to explain the Practice Note.

However, as I think would be obvious, the general rule about costs in the CPR is that the unsuccessful party will be ordered to pay the costs of the successful party(see CPR 44.2). Where the protected party is not taking part in the claim or even necessarily objecting to the payment, an issue might well arise as to whether they could be described as an unsuccessful party in an assessment. And in this situation the court may be required to exercise its discretion having regard to the circumstances more generally. Indeed, and perhaps more significantly, in the context of a solicitor/client assessment under the Solicitors Act 1974, section 70 (9) provides that on an assessment at the request of the solicitor, and when the client does not attend the assessment, the costs are not payable according to the event (the one-fifth rule) and thus normally borne by the solicitors on the understanding that the assessment is taking place in their interests. This statutory consideration may have some relevance in these circumstances. Whilst making make no determination of the matter, it might be thought to provide some underpinning to the guidance in Practice Note.

B. Approval in this case

The inter partes claim

Unusually I have not been provided with any objections made by the Defendants at least in the form of Points of Dispute or in correspondence. Somewhat surprisingly, a person described by Mr. Smith as a costs negotiator was able to set out in detail the offers made in negotiation but, it was said, did not have details of the specific arguments by the Defendants. Ordinarily I would have expected Mr. Smith to have been kept apprised of any objections (not least because one might expect that he would have wanted to counter them). It is said however that there are costs which are likely to irrecoverable particularly as there were credibility issues and difficulty obtaining instructions and it is said that it is almost inevitable that the solicitors would lose something on assessment.

I have some indication from Mr, Smith's witness statement as to matters on which there were thought to be some vulnerability but there were shortcomings in the way that this matter was addressed. Ordinarily I would expect counsel or costs draftsman/ lawyer to run through, relatively briefly, the sort of issues that arise on assessment and their likely effect on the amount payable. That did not happen in the way I anticipated. However bearing in mind the objections which I think that might well be made (some of which I have set out in my appendix) it seems to me that the inter partes recovery is substantial and that it is in the protected party's interest to accept the sums offered, and, accordingly, that I should approve it.

The shortfall claim

I accept that I should give due weight to the Litigation friend's consent. The difficulty as I have indicated, is that I am not satisfied that the Litigation Friend has any clear idea as to whether the costs claimed are reasonable. That is entirely understandable as she is not experienced in dealing with such matters.

The Claimant is a vulnerable person. I am told the Litigation Friend is also a vulnerable person. Without making any finding on it, I can see that in respect at least of certain elements of the issue of liability, the claim had some significant complexities. All these matters are relevant considerations justifying costs recovery both on a standard and an indemnity basis assessment (r 44.4(3).

Regardless of the merits of the criticism of the procedure for approving claims. Mr. Roy's firm submission was that I should approve the proposed compromise. I am not however persuaded that I should assume that, because there has been what is said to be a high percentage recovery, that there is going to be substantial amount of further reasonable solicitor-client costs. That does not follow (indeed a high recovery might militate the other way). Nor am I persuaded that I should make a further allowance of say 5-10% for solicitor/client costs over and above required relying on what Cook on Costs 2017 is said to have indicated as being a common difference between the outcome on the indemnity basis as compared with an outcome onthe standard basis so that costs payable are some 90-95% of those claimed. Each case inevitably tums on its merits (different solicitors bill differently).

Mr. Roy says that having reviewed the bill and sampled the documents he could not find any areas for significant deduction. Even if that were the case, it seems to me that at least he should have dealt with some of the issues ordinarily arising on assessment. I would expect on an application such as this for the representative to address certain the sorts of issues and concerns that could be expected to arise on an assessment (and the objections that would be taken by a protected party) and analyse them at least to some extent. Indeed in this case there is some indication as to what these concerns might be in Mr. Smith's statement.

I should stress there was no real attempt to identify work in the electronic bill that was reasonably done- but which could not be claimed from the Defendants of the sort indicated above (at [62]). If there were any such work and the sum could be identified there might be good grounds to approve payment for this work. It was suggested there was work relating to credibility issues- or arising out of a failure to give proper instructions. Such work is, I accept, liable to generate costs that are not recoverable from a defendant. However even work of this nature may be recoverable inter partes if, which might be assumed to be the case here, the difficulty getting instructions arose out of the Claimant and his wife's vulnerability and indeed the Claimant's injury. It was suggested that there were costs associated with a care report that was not disclosed but it seems to me it cannot be assumed that costs for work done in considering the value of claim were not recoverable (whether the report could have been or was disclosed or not). It may well have been reasonable to get such a report even if no directions had been given for it and even if it was not served in circumstances where, as here, the parties were considering quantum (and needed to determine the extent of any care claim). In any event in the absence of any real attempt to identify this work I am unable to make an assumption that work would not be recoverable in substantial sums from the Defendant.

As I sought to explain in the hearing it seems to me that there are relatively obvious concerns looking at the Phase totals as they appear in the electronic bill. In this case I have some particular concern about the Expert's phase, in particular the solicitors costs of 60,000 plus VAT and counsel's fees at over £9,380. These exceed by a significant margin the costs of the experts themselves, which are claimed at some £36,000 plus VAT. Such a discrepancy on costs budgeting and on costs assessment can be, and often is, indicative of unreasonable costs. Further to my mind costs in the Issue and Statement of Case phase (£87,000 plus VAT) and the ADR phase (£45000 plus VAT) look high given the stage at which the case reached. Cumulatively the sums claimed look to be high and open to some reduction on an indemnity basis.

I have set out some more specific concerns in the appendix. In the course of the hearing I raised at least some of these concerns (some in more general terms than I raise now). Mr. Roy's response was threefold. First, I was wrong to have to looked at the claim in any detail: a broad brush approach was required and I was getting too "caught up in the weeds". Second, (and perhaps not so easy to reconcile with his first submission) he said he had had himself done an analysis of this sort. Third, my indication that I had to undertaken this analysis was unfairly getting into the 'arena' and taking points that a protected party might take. This all supported his case notwithstanding any concerns that I might have for a broad margin of error and I should approve the sum to be deducted.

For the reasons which I have already set out I do not accept these submissions. Rather obviously the Court is, I think, required to consider broadly what would happen in a detailed assessment if it is being asked to dispense with it as not being the interest of a protected party. I cannot accept that raising concerns of these sort involves the court improperly getting into the arena. At the risk of repetition, the court is required to consider whether it is in the interests of the protected party for there to be a detailed assessment and in accordance with trite principles of law must give reasons for its decision. That is what I have sought to do.

I reject the contention that my approach is too detailed or over demanding. It is essentially broad brush. By using the search and filtering function of a properly phased electronic bill it should be possible to see where and how costs are claimed. The points that I have raised are the sort of points or matters that would be looked at on inter partes assessment and a solicitor/client assessment. Consideration, for instance, as to whether the Claimant is in fact liable for the costs claimed is elementary and the solicitor should have checked when certifying a bill (indeed receives payment for doing so- 2 hours are claimed here I think for this work- see item 928). Indeed I would expect a costs draftsman when preparing a bill to have very good idea as to what sums might be vulnerable to reduction on an assessment, whether on the standard or indemnity basis. It seems to me that what I have done is little more than a basic check, involving some sampling. Based on my experience in dealing with this kind of case, this exercise is well within the capacity of costs lawyer or costs draftsman used to preparing Bills of Costs and Points of Dispute. Indeed where a shortfall is pursued I understand that other solicitors are able to provide the court with a similar sort of analysis. In any event it does not require any consideration of difficult issues of principle just an awareness and experience of what is liable to happen on detailed assessment. It seems to me that this is a task carried out regularly by those handling everyday costs claims.

If Mr. Roy has carried out this sort of analysis he has not shared it with me. He has dealt with what might be described as high level points of principle but he has not, to my mind, dealt with at least adequately, what is sometimes referred to as the 'nuts and bolts' of assessment. In the circumstances, he has not provided me with a sufficient basis for concluding that there would be a shortfall in such sum as would justify the deduction he says should be made from the Claimant's damages.

span style='font:7.0pt "Times New Roman"'> I acknowledge that the sum that it is proposed to be deducted is significantly less that the full 100% of the bill. So it may be thought that allowance is already made for some of the points that I raised. I am conscious too that although some of the concerns that I have raised in the appendix, if they prove to have substance on closer consideration, may have a modest impact in themselves ( the Grade D point is said to account for about £2,000, the possible pre-CFA costs and the extent of the estimated costs.). However the concerns about excessive time, delegation and counsel's fees could reduce the costs even on the indemnity basis significantly. Mr. Smith acknowledges in his witness statement that the Defendant was liable in an inter partes assessment to complain about matters such a excessive time, non progressive items and a lack of delegation. He says that the Defendant was liable to have "some joy" on such points and thus I understand him to accept that some substantial inroads may be made into the costs on the standard basis. As I have sought to explain the same sorts of concerns often arise on an indemnity basis.

span style='font:7.0pt "Times New Roman"'> Albeit my analysis is necessarily somewhat impressionistic it strikes me that the recovery of about 85% of the cost claimed on the electronic bill may well be reasonable on the indemnity basis. In any event I do not accept that I should permit the solicitors the margin of error that is sought at least without some greater degree of analysis as to what would happen in detailed assessment. Of course it may well be that on closer consideration many of the concerns turn out to be unwarranted. But as I have explained part of the problem that arises is that I have not been given the sort of analysis I require.

-the "pure" solicitor and client cost

span style='font:7.0pt "Times New Roman"'> There are said to be three categories of cost which are included in the separate bill for these costs. They comprise, at least principally (1) work in relation to immigration issues (£14,020) and (2) work on the appointment with Court of Protection of a Deputy (£5,179) (3) work on funding (£178). My understanding is that it is at the very least implicitly accepted that the costs in respect of work in these three categories could not, in principle be recovered from the Defendant.

span style='font:7.0pt "Times New Roman"'> Mr. Roy argues that solicitor is obliged to advise not just on matters directly within his instructions but also on such matters reasonably incidental to those instructions, including those which might later come to light; Minkin v Landsberg [2015] EWCA C1152).This point, he says, is of particular significance in a case such as this. The burden and scope of responsibility upon a solicitor is, he argues, at its very highest and broadest) when acting for a severely injured incapacitated TBI client due to their extreme vulnerability. Marital issues, advice on trusts, benefits, are all issues that might arise in the context of a TBI claim and all the work is covered by the term of the CFA even if that might not be specified expressly within a retainer but which the solicitor would be negligent not to advise on and was reasonably incidental to PE's instructions.

span style='font:7.0pt "Times New Roman"'> However Mr. Roy did not, at least satisfactorily, explain the arguments that might be made by the protected party against these claims. It seems to me that there were some general points that need to be considered arising out of the terms of retainer, The CFA say this:

What is covered by the agreement

Your claim for damages for personal injuries suffered on or about 6^th July 2018

This work may include

...

Any work ancillary to your claim for damages, such as attending relevant proceedings before tribunal or court other than civil courts.

span style='font:7.0pt "Times New Roman"'> First, although much emphasis was put by Mr. Roy on the word "ancillary" which was relied upon as permitting the solicitors to charge for work which might have some connection with the claim, I would have expected a protected party to question why it might be that the relevant costs could not be recovered from the Defendants as costs incurred in the claim but were recoverable against the Claimant as "ancillary" to the claim.

span style='font:7.0pt "Times New Roman"'> Second, even if the costs were prima facie payable under the retainer the other matter to consider is whether they were "unusual", and if so there might be a presumption that the costs were unreasonable.

span style='font:7.0pt "Times New Roman"'> The reasons for my concerns are perhaps clearer considered against the work itself.

- costs for immigration work (1)

span style='font:7.0pt "Times New Roman"'> As I have already noted, Claimant and his wife entered the UK illegally. The relevant work is said to have been undertaken to "to define" their immigration status. As I understand it the Claimant and his wife were liable to be deported this would clearly have implications for the claim . Work on this matter was plainly necessary in pursuit of this claim when dealing with quantum and to this extent could presumably be claimed from the Defendant. As I understand it PE did not have the expertise to deal with any application that needed to be made to regularise the immigration status of the Claimant and his wife by way of a application and it is at least principally, work of this nature which is claimed in the pure SC claim.

span style='font:7.0pt "Times New Roman"'> I accept that the solicitors considered that the Claimant needed to be put in touch with specialist immigration solicitors, who could assist with any application to obtain appropriate permission to remain in he country. Without making any finding on it I have however some difficulty seeing how facilitating the instruction of such solicitors could be work on the claim and covered by the CFA. Indeed it is not clear to me that the prospect that the Claimant may have been deported and if he had been deported then may have decided not to pursue the claim (for practical reasons or otherwise) would render that work costs of the claim. But that is, as I understand it, how it was put. For such work it might said that you would need a separate retainer -and it is not said I think that there is any separate retainer other that the CFA to cover such work.

span style='font:7.0pt "Times New Roman"'> As I have said Mr. Roy relies on the use of the term 'ancillary' in CFA. But my concern is that this term may be more apt to cover word such as the attendance at inquests (which might be regarded as fact finding [22]) or the attendance at say criminal proceedings in order together gather information for the claim (again as part of fact finding exercise). These are both matters which might be said to progress the claim. It seems to me doubtful (to say- perhaps -the least) that work done on benefit applications, setting up trusts, advice on employment matters are work in a personal injury claim. In the same vein, it is not clear to me that work on the immigration application itself is of use and service in the claim and thus ancillary to it (see In Re Gibson's Settlement Trusts [1981] Ch 179, recently considered in Hadley). I stress I make no finding on these matters, but it is enough I think to say that the merits of the solicitor's case on this point are far from clear to me.

span style='font:7.0pt "Times New Roman"'> I had understand Mr. Roy's written advice to be to the effect that these costs were not "unusual" for the purposes of CPR 46.9 . At the hearing however I understood him to say that there were unusual for these purposes but were still recoverable as costs because it was understood that the solicitors would do work on it- and the Claimants can be taken to have instructed the solicitors to have done the wok. I make no finding on this but even if the work was covered by the CFA in my view I have real doubt as to whether the costs could be regarded as anything other than unusual work in a claim for personal injury damages. And although Mr. Roy sought to suggest that the presumption of unreasonableness did not apply because, he said, a suitable explanation had been given it was not clear from the documentation that this was the case.

span style='font:7.0pt "Times New Roman"'> In any event I have real concerns about the quantum of costs- including the charging of the hourly rate by the Grade A for work where the fee earner appears to have had no real expertise in immigration. Mr Roy suggests that the costs would assessed at between £230 and £12,750 odd which at least suggest he has some doubts about the charges. To my mind, regardless of the concerns I have raised above, a cursory look at the charges claimed reveals the need to look at the more closely before coming to any conclusion as reasonableness of any substantial charge for this work.

- costs for work on appointing a deputy (2)

Mr. Roy argues that the Claimant can be taken to have recovered damages to pay for the costs of appointing a deputy so it is said there can be no difficulty paying these costs as a Deduction from Damages. He also relies upon the court order made at the time of approval which provided that PE were to apply for a deputy to be appointed.

In my experience this is also a highly unusual element in a claim for Deduction from Damages. I have real difficulty seeing how the work can be covered by the CFA (and again it is not suggested that there is any other retainer for this work). The work was done after the claim had finished and followed from the successful recovery of damages in the claim so it is difficult to see how it could be progressive of the claim; and how is might be regarded as work done on the claim (whether ancillary or otherwise to the claim).

Moreover, and perhaps most significantly, the right to claim the costs of an application for the appointment of deputy arises in the deputyship proceedings in the Court of Protection (COP). Indeed, an order has been made in the COP proceedings dated 26 October 2022 for the payment of costs on the standard basis to the deputy in respect of his application for appointment.

As I see it, there is no difficulty in principle with the protected party paying for these costs if they are claimed in the normally way in a bill in the deputyship proceedings; this is assessed provisionally in the normal way by a Costs Officer or Costs Judge. But I have difficulty seeing how any claim can or should be made in the current proceedings. Quite apart from anything else it is difficult to see why there should be two separate claims: this one and one in the COP (and the protected party exposed to two separate claims for what might be same costs). If there is any claim to be made for the work of Mr. Smith (which itself might be doubtful) as opposed to the deputy himself, then- again without making any finding in it- it would seem that it can be considered in the COP claim with the work of the Deputy. It is perhaps for this reason that I have not yet seen any claim of this sort in a claim for Deduction from Damages (notwithstanding that many of these claims are against claimants for whom a deputy has been appointed).

I might perhaps add that in COP claims for costs in general the rates to be allowed are normally not higher than Guideline hourly rates. And without making any finding on this I have considerable concern about the costs claimed in what might appear (I make no finding on it) a straight forward application following an order made in the High Court. The advice required from a deputy familiar with the procedures is perhaps short (not least because of the terms of the order made concluding these proceedings).

- the funding costs (3)

span style='font:7.0pt "Times New Roman"'> Mr. Roy says that these costs are for communications with ATE funders. It is said that these are not caught by the general understanding that time spent dealing with the funding (in general in respect the solicitors charging) are covered by their overheads and not properly charged as an hourly rate (Motto v Trafigura [2011] EWCA Civ 1150 (see inter alia 108 to 110) ) At the very least there might be a question whether they are costs of the claim. However it is not necessary for me to deal in detail with any of these arguments and indeed whether he is right about this since the costs claimed are about £170 so notwithstanding any concern it makes no real difference to my conclusion.

-generally

span style='font:7.0pt "Times New Roman"'> There is perhaps a claim for work obtaining an order for the release of payment of some dental work before the deputy was appointed, This matter was not considered in any detail but it is difficult see that the sums are anything more than very modest. In general I have considerable doubts about these claims. If these claims are to be pursued I think they should be considered in an assessment and not simply accepted as part of a margin of error on a claim by a solicitor.

Conclusion

span style='font:7.0pt "Times New Roman"'> It follows from the above that whilst I approve the inter partes costs settlement I am not however satisfied that it is in interests of the Claimant to dispose of an assessment under CPR 46.4.

span style='font:7.0pt "Times New Roman"'> I bear mind all that is said about costs and the potential exposure of the protected party to costs. I should not I think be held in terrorem on this point. The solicitors in this case have had an opportunity to set out their case for a shortfall payment. That should not have been difficult. But rather than engaging with concerns about what might happen in an assessment, high level issues about what seems to be a fairly settled procedure have been pursued which, for the reasons given, in my judgment lack substance.

Given the sums that may realistically be at stake it is not clear to me that an assessment of the shortfall claim should be a lengthy matter and unless the pure SC claim is still to be pursued (so that more involved legal issue may arise) it might just involve a costs draftsman taking me through relevant underlying documentation.

Appendix

a. Funding arrangements. I make no finding on this, but the bills appear to contain items for work carried out before 24 September 2018, when it appears the CFA was entered into. The main body of the CFA and Schedule 2 appears to permit the solicitors to charge from the date of the execution of the CFA for "work done from now" and it is not clear to me that the CFA does have retrospective effect. If on proper consideration there was no right to claim the costs the bill has not been properly certified - I note that 2 hours appears to be claim claimed for the task of checking the bill was properly certified by a senior fee earner (I would add that very often the bill has not been properly certified it can have consequences generally for other claims in the bill).

b. Estimated time - this is for work which, ordinarily understood, has not been properly recorded on the time ledgers (and is commonly therefore estimated by the cost draftsman). There appears to be some 27 hours of such time in the electronic bill (£10,000). That appears to be a very significant period of time (see for example items-359 and 883). Without making any finding on this, some explanation might be required as to why so much work has not been recorded and it seems to me that the costs might be susceptible to substantial reduction (see the comments of Ward LJ in Ralph Hume v Gwillim [2000] EWCA Civ 1500 at 763]

c. Hourly rates. Even if agreed with the client they may be presumed unreasonable on an application of the presumptions under CPR 46.9 (see McDougall, EVX). The solicitors are in Ealing (London 3/Outer London) for the purpose of Guideline hourly rate). The Grade A fee earner who appears to have done most of the work on the matter is at £354-385 per hour. Grade D (might be understood a paralegal) is claimed at £212.

Mr. Roy in his initial advice says that the rates are eminently reasonable. It is not clear to me, and I do not think it is said, that any explanation was given to the Litigation Friend as to whether such rates were or might recoverable inter partes. However it seem to me that it might be considered that the rates are unusual. The implied[23] GHR rates for 2019 were respectively somewhat below £282 for the A and £129 for D respectively. I raised a concern at the hearing in August about the reasonableness of the Grade D rate and did not understand Mr Roy to argue that I was wrong to do so (but rather to say that any reduction this implied was modest and not likely to impact on his case). Without again making any funding on it, I am doubtful that the Grade A rate is necessarily unreasonable for a solicitors doing supervisory work but I am concerned that in this case a Grade A fee earner at what might be said to be a heavily enhanced rate is doing much of the everyday work.

d. Reliance on counsel. Typically if the hourly rates are high that generally connotes a high level of experiences and expertise and may call into question the reasonableness of instructing counsel or the extent of the instruction. Even accepting that the issues that arose as to whether the Defendant could avoid the insurance contract under the 2010 Act and other related issues such illegality were of some complexity the extent of the reliance in this case to my mind requires some consideration. There appears to have been substantial reliance initially on junior counsel who took silk in the course of instruction (and appears perhaps to have charged at senior counsel rates).

e. Delegation. There appears to have been very limited delegation by the Grade A fee earner. The Grade A appears to have been involved in a substantial amount of the work done and is even engaged in preparing electronic bundles (see item 829) and attendance delivering a fee remission application to the court (see item 333, with travel- 1 hour). Even in high value claims there is normally significant scope for much of the work to be delegated to a lower grade fee earner typically perhaps in respect of disclosure, preparing the first drafts of witness statement, the provisional schedule of loss (this can normally done by junior counsel effectively and at lower costs than senior solicitors -with junior fee earners at say Grade D and C providing the appendices) and at least dealing with the initial instruction of the experts. Much of routine work and routine correspondence is charged at what might said on any view to be high rates - if I have not misread the bill.

f. Multi-fee earner attendances at meeting. There appears to be a substantial amount of dual attendance at least in the early stages. The reasonableness of this would fall to be considered in an indemnity basis assessment.

g. Time spent. Obviously even on an assessment on the indemnity basis consideration of the reasonableness of time spent this can be a significant issue. There are many items in the bill but sampling reveals some concerns as to excessive time such as:

o Lengthy consideration of Defence (albeit there is ancillary work done at the time including instructions to counsel) and perhaps at least 2 full days work on this (see items 124 to 128); it is not clear to me why so much time was spent by solicitor if counsel was to be instructed. Even allowing for the fact an issue under the 2010 Act is not everyday matter in personal injury litigation it is not clear to me that the level of complexity was such as to justify this level of time the circumstances.

o There is about 22 hours on what I understand to be a provisional schedule see items 104 to 108. I have some doubt that the losses needed to be set out in great detail on issue

o Engaged considering the Defendant's hearsay evidence and how to respond, Item 159- 2 .2 hours

o Engaged reviewing file and considering Defendant's Part 18 request and preparing instructions to counsel and all enclosures thereto. Item 193, 5.3 hours

o Engaged reviewing and considering draft Part 18 replies received from Counsel and redrafting the same. Item 202, 2.2 hours see too item 204.

o Engaged reviewing file and position and preparing detailed instructions to [?an expert] and reviewing all draft transcripts and preparing appraisal and instructions to counsel. Item 581, 7 hours

o Engaged reviewing file and making revisions to expert report. Items 629 - 636 - close to 15 hours

o Engaged reviewing and considering notes from Conference with expert and further reviewing report and drafting suggested amendments. Item 674, 4.1 hours

o Letter of instruction to expert 9including review of INA. Item 669, 3.3 hours

o Engaged reviewing file and considering other material and availability dates and drafting email to the Defendant with regards to proposed JSM. Item 854, 1.6 hours

o Engaged reviewing file and position and preparing draft order for approval and anonymity. Item 878 3.2 hours (nb this was a lump sum settlement).

h. Counsel's fees. In the hearing I was unable to locate the CFA with counsel. I would normally expect to see the hourly rate of counsel but I have not seen this and have not seen any consideration of this sort by Mr. Roy. The case appears to have been considered suitable for junior counsel (albeit experienced junior counsel). However some of the fees charged seem to require some further consideration: £7,500 for the attendance of the approval hearing (albeit including advice) a brief fee of £4,500 on an application; £3,500 for a directions hearing. In general work done under CFA short of trial is charged on an hourly rates so would ordinarily some time records would be required. The overall costs of counsel of some £53,000 (ex VAT) look, on a fairly cursory consideration, high to me (and there is some suggestion in the papers that cost draftsman though a reduction of 15/20% on standard basis might be expected).

i. Disbursements- Most of the fees looks fine but I am concerned about the fees of one expert at item 720 for £13,473 (excluding VAT) -albeit it covers time spent on the report and in conferences it would I think need to be explained why so much time was spent by this expert.

j. Costs. Over £23,000 appears to be claimed for drafting the bill (175 hours) 2 hours for checking). Overall these sums might also appear high and open to some reduction (175 hours is generally understood to equate to about 5 weeks solid work which might appear high in circumstances where it is not unreasonable to suppose there were electronic ledgers).

[1] Until the hand down of judgment (see para, 4 below)

[2] The redacted/altered parts in square brackets.

[3] I was told that at the hand down Counsel was no longer representing the Claimant but the Claimant's solicitors. It was said that at that stage a conflict of interest had arisen.

[4] I am told this does not include PE's costs of providing advice to the client and my understanding is that PE is content to waive that particular element of shortfall.

[5] In the form used normally for an inter partes costs claim. It includes the costs of drafting the bill which on solicitor/client basis is not ordinarily borne by the client.

[6] The judge dealing with the appeal was informed of the change of plan and, I was told, has not objected.

[7] In his advice he suggested that cost judges are doing the best they can to deal with these applications in a way that balances fairness, pragmatic and proportionately in accordance with the overriding objective.

[8] He suggests in terms that the court is in effect , saying, "We do not think that solicitors should generally be deducting shortfalls from damages. We are therefore going to create, interpret and apply the law to make it difficult and costly for them to do so, to discourage them from doing so, and to penalize them if they nevertheless do so."

[9] In accordance with the 1/5^th rule- see section 70(9) of the Solicitors Act 1974.

[10] Legal Aid, Sentencing and Punishment of Offenders Act 2012

[11] Sitting myself as I do as Master in KB.

[12] CFA's are entered into by the litigation friend, albeit they have general common law right to the recovery of their costs from the protected party subject to their conduct of the claim on behalf of the claimant having been reasonable.

[13] Seemingly approved by the Court of Appeal in Hadley v Pryzybylo [2024]EWCA Civ 250

[14] in which the Deputy challenged a claim which the court was told had "settled".

[15] As I sought to explain in EVX v Smith [2022] EWHC 1607 (SCCO)) [36] to [42]);

[16] (3) Subject to paragraph (2), costs are to be assessed on the indemnity basis but are to be presumed –

(a) to have been reasonably incurred if they were incurred with the express or implied approval of the client.

(b) to be reasonable in amount if their amount was expressly or impliedly approved by the client;

(c) to have been unreasonably incurred if –

(i) they are of an unusual nature or amount; and

(ii) the solicitor did not tell the client that as a result the costs might not be recovered from the other party.

[17] See perhaps Clare v Joseph [1907] 2 KB 369.

[18] I reject what seems to me a speculative suggestion that the rule change came about because concerns about fairness rather than other concerns such a convenience. My understanding is that the old rules continues to apply to old cases.

[19] Other examples include an application reasonably made in the interests of the protected party but which fails so that the costs are not recovered from the defendants.

[21] The "normal consequences" appears to be as it understood it that costs should be allowed in the sum claimed- an approach which appears odd given the requirement on the court to approve the payment of costs.

[22] See Roach v Home Office [2009] EWHC 312

[23] Taking a figure between the GHR 2010 and the GHR 2021

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	England and Wales High Court (Senior Courts Costs Office) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Senior Courts Costs Office) Decisions >> CFB v AXA Insurance UK PLC [2025] EWHC 915 (SCCO) (15 April 2025) URL: https://www.bailii.org/ew/cases/EWHC/Costs/2025/915.html Cite as: [2025] EWHC 915 (SCCO)

England and Wales High Court (Senior Courts Costs Office) Decisions