Middleton v Vosper Thornecroft (UK) Ltd

I acted in a detailed assessment recently where the Claimant had failed to serve a statement of reasons in respect of the success fee in accordance with CPD 32.5(3) when serving the bill of costs and notice of commencement.   The appropriate statement was subsequently served.  It was argued for the Defendant that the failure to serve with the bill amounted to a breach of the rules which was not rectified simply by serving the document late and the consequence was that the success fee was not recoverable.  The judge questioned where in the rules it stated that the document needed to be served with the actual bill.  Despite my best efforts, I was unable to point to a specific provision that dealt with the time for service.  The judge concluded that it would be sufficient to serve the document in advance of the hearing and therefore allowed the success fee. 

In the event, this decision was not decisive to the outcome of the detailed assessment and I still managed to comfortably win on the Defendant’s offer.  However, I was left with the strong feeling that the judge was wrong but unable to identify quite where he had gone wrong.  The best I was able to do was note that the heading to the section listing the documents to be served is worded: “Commencement of detailed assessment proceedings”.  Common sense therefore suggests that the timing for service of the documents is at the same time as commencement of the detailed assessment proceedings (ie when the bill and notice of commencement is served, as per CPR 47.6).

Before travelling to the hearing I had put in my briefcase a copy of a judgment I had come across on Lawtel that looked interesting.  I didn’t have a chance to read this on the day of the hearing.  You can imagine how annoyed I was when, a few days later, I got around to reading the judgment only to discover it was exactly the case I needed.

In Middleton v Vosper Thornecroft (UK) Ltd & Others, CC (Winchester) 2/6/09, the claim was funded under a CFA that pre-dated the revocation of CFA Regulations 2000.  No statement of reasons was served with the Bill but some reasons were subsequently provided in the Claimant's replies.  His Honour Judge Iain Huges QC, sitting with Regional Costs Judge James, made a number of findings:

1.                  The “statement of reasons” to be served must be “the statement of reasons as included in the CFA.  The paying party is entitled to the whole of that statement and not an abbreviated version.  Further, he is entitled to know that that is what he is being given”.  He concluded: “the statement of reasons set out in the reply did not amount to a compliant statement.  First, because it was neither provided nor identified as being the statement of reasons given in the CFA.  Secondly, it did not have the appearance of being such a statement.  Thirdly, even if it had been identified as the statement of reasons in accordance with the rules, in fact it was not”. 

2.                  The “CPR require the receiving party to serve the statement of reasons and the other documents specified in section 32 at the same time of serving the notice of commencement and that the Claimant in this case failed to do that.  That triggers the sanction imposed by CPR 44.3B(1)(d) which denies recovery of his success fee”.

Another useful case in defendants' armoury.