In Dipcot Holdings Ltd v Euro General Retail Ltd (Unreported, ex tempore, High Court, O’Hanlon J., 28 June 2021) William Fry and James Nerney BL acted for the plaintiff landlord (Landlord) in summary summons proceedings to recover rent arrears.
Ms. Justice O’Hanlon in the High Court awarded costs to the Landlord against the defendant tenant (Tenant), to be adjudicated in default of agreement. O’Hanlon J departed from the default measure of awarding costs on a “party and party” basis and instead awarded costs on a “legal practitioner and client” basis (High Court Decision). Access our earlier article on this decision here.
“Legal practitioner and client costs” cover all costs, except those of an unreasonable amount or those unreasonably incurred. They differ from “party and party” costs which cover only necessary or proper costs incurred in the prosecution or defence of the proceedings.
The parties failed to reach agreement on the bill of costs furnished on behalf of the Landlord. The matter was referred to the Legal Costs Adjudicator for adjudication on the costs.
Determination of the Legal Costs Adjudicator
The Legal Costs Adjudicator issued a determination in favour of the Landlord, allowing a sum amounting to 97% of the total amount of costs claimed in the bill of costs. The Legal Costs Adjudicator was of the view that the case was not a straightforward debt collection matter, but rather a complex one involving an ongoing breach of a lease agreement, continued accrual of monies owed, with consequent interest and VAT issues. He noted that the complexity of the case was compounded by the Tenant who, after entering an Appearance in the High Court, played no further part in the proceedings until the matter settled on the eve of the hearing.
According to the Legal Costs Adjudicator, the level of work involved was evident in the bill of costs. While a “legal practitioner and client costs” order is not a blank cheque, the Legal Costs Adjudicator found very little in the bill of costs to be unreasonable.
The High Court Decision to award costs on a legal practitioner and client basis was significant. It was based upon a contractual obligation in the lease that required the Tenant “to pay to the Landlord all reasonable costs charges and expenses (including legal costs and surveyors fees) which may be properly incurred by the Landlord … all the costs which arise or result to the Landlord or are incurred in enforcing any of the covenants on the part of the Tenant herein”.
The follow-on determination of the Legal Costs Adjudicator confirms the starting point in considering a disputed bill of costs in legal practitioner and client costs adjudication, is that deductions are limited to costs unreasonably incurred.
To discuss any aspect of this update in more detail, you can get in touch with your usual William Fry contact, or any Litigation & Dispute Resolution team member.
Contributed by: Lulu Trainor