Synopsis
When considering whether a breakdown of an invoice for legal services may be required, the Court found that a breakdown is only necessary when assessing whether the fee is reasonable and proportionate, or where abuse is suspected. The argument that a breakdown was required and that costs should be assessed at nil in the absence of a breakdown was rejected.
Background
The underlying litigation related to an incident in which the Respondent was injured while riding his motorcycle in May 2018. The first Defendant was uninsured, so the Appellant was joined as a second Defendant. The first Defendant played no part in the proceedings, and the matter settled on the first day of trial. The Respondent was awarded £20,000 in damages, plus their costs, subject to the fixed costs regime.
The Respondent is a Portuguese speaker and required an interpreter throughout the proceedings. The Respondent’s solicitors served a costs schedule on the Appellant, which claimed £924 for an interpreter at trial. The invoice for the interpreter was addressed to the Respondent’s solicitors in the name of PALS. It is understood that the Respondent’s solicitors and PALS are related companies.
The original assessment and subsequent appeal
At the assessment, the Appellant took the view that the fees should not be recoverable, as they were not recoverable under CPR 45.29(i). This was accepted by the judge during the assessment, resulting in the Respondent appealing the decision to the Court of Appeal.
The Court of Appeal allowed the appeal, determining that the interpreter’s fee was a recoverable disbursement under the rules as in force at that time. This has now been amended to be expressly included under CPR 45.29(i)(v). The £924 fee was reduced to £794.40, as considered reasonable. The Appellant had requested a breakdown of the invoice so that the sum passed on to the interpreter could be identified, but this was rejected on the basis that the Respondent would be “at risk” if they failed to provide the breakdown voluntarily.
The submissions made
The Appellant’s position was that the Respondent was only entitled to recover the sum that constituted a genuine disbursement, that any element of the fee retained by PALS was irrecoverable, that a breakdown was required to enable a fair assessment to take place, and that the Judge’s assessment was too high.
The Respondent’s position was that there are no rules requiring a breakdown and, in any event, that the Judge’s assessment was reasonable.
The Court’s considerations
First, the Court drew a distinction between profit costs and disbursements, referring to the decision in Crane v Cannons Leisure Centre, where it was held that:
“A characteristic of whether charges of a person engaged by solicitors are profit costs or disbursements is whether the solicitors have personal responsibility to the client for the work done.”
The Court rejected the Appellant’s argument that the interpreter’s invoice included a disguised element of profit costs or an agency element, as interpretation services are not services for which a solicitor carries personal responsibility. No issue was identified with the interpreter being obtained via a company, and the Court recognised that there may be advantages to this approach.
When considering the connection between the Respondent’s solicitors and PALS, the Court accepted that this arrangement was lawful and noted that, had there been no common ownership, it was unlikely that a breakdown would have been sought.
The Court accepted that there may be occasions where abuse is suspected, or where a breakdown is required to assess the reasonableness of the fees incurred. However, it found that there is no rule of law requiring a breakdown in every circumstance where litigation services are provided by a company.
When considering the amount allowed for the interpreter at the assessment, the Court identified that the Judge had calculated a mean figure from the various alternative quotes obtained by the Respondent. No error of law was identified, and no reason was found to interfere with the previous assessment of a proportionate and reasonable fee. The appeal was subsequently dismissed.
Analysis
This case demonstrates that a breakdown of a disbursement for litigation services obtained through a company or agent is not typically required. A breakdown will only be required where it is necessary to assess the reasonableness of the sums charged or where abuse is suspected.
Receiving Parties will welcome the confirmation that an invoice for such disbursements is likely to suffice on assessment. Paying Parties, however, should exercise caution when requesting a breakdown, as the likelihood of one being required is relatively low. It may be more prudent for a Paying Party to consider the overall fee against market rates when assessing reasonableness. A challenge should be raised if the fee appears unreasonable, but this may not require a breakdown, as the Court will be prepared to reduce the fee if it also considers the overall amount claimed to be unreasonable.
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