Costs Litigation Blog

This blog is written by Cressida Mawdesley – Thomas, a member of 12KBW’s Costs Team.

The decision of Deputy Master Campbell in Hankin v Barrington & Ors [2021] EWHC B1 (Costs) considers: (1) what is a reasonable brief fee for leading counsel in a 13-day liability and quantum personal injury trial; and (2) what is the appropriate level of abatement when a case settles nearly three weeks before trial.

Summary
In this case leading counsel’s brief fee was reduced from £125,000 to £75,000. However, it was held that an abated fee was payable despite the case settling nearly three weeks before trial. In this case 50% of what had been determined to be the reasonable brief fee (£75,000) was allowed as the abated fee (i.e., £37,500). A further deduction was made to account for the work counsel undertook in mitigation of his loss, meaning counsel’s final abated brief fee was £27,500. It was not in dispute that £15,000 was also payable to leading counsel for the mediation.

This blog respectfully suggests it was wrong to account for what leading counsel had earned during the trial period. This is contrary to Lewis v The Royal Hospital Shrewsbury Hospital 20 May 2005 (unreported) (below) and was inappropriate in circumstances where no account was taken of counsel’s 12 lost refreshers. It does not appear from the judgment that Leggatt LJ’s obiter comments in K/S Norjarl A/S v Hyundai Heavy Industries Co Ltd [1991] 3 All ER 211 [@ 222] were drawn to the Court’s attention. In K/S Norjarl A/S it was explained that in a case set down for a lengthy hearing, an abated brief fee would normally include an element of compensation for possible loss of refreshers. Moreover, trying to ascertain what counsel would have earned had their diary not been occupied is an inherently speculative and unsatisfactory exercise.

It is also submitted that interfering with the headline brief fee, before considering the issue of abatement, in a budgeted case (the trial phase at £307,500), undermines the central aim of costs budgeting, which is to provide transparency.

Background
The Claimant suffered severe head injuries which ended his career as a professional rugby player. He claimed £3,155,842.76 from three defendants, all of whom denied liability. The case was listed for a 13-day trial on liability and quantum that was due to start on 15 March 2021. However, the case settled on 24 February 2021, 19 days before the start of trial.

Terms of Settlement
The terms of the mediation agreement were that the First and Second Defendants would pay agreed damages and the Claimant’s costs, with there being no order for costs against the Third Defendant.

Determining an Appropriate Brief Fee
It was noted that there are two elements to a brief fee. The first is to cover all the work done by way of preparation for representation at the trial and attendance on the first day of the trial, see the judgment at 22] citing Hobhouse J in Loveday v Renton [1991] Costs LR (Core) 204. The second, is to compensate counsel’s “commitment” and the fact that other work will likely be turned away once a trial goes into counsel’s diary.

In determining what is an appropriate brief fee a Costs Judge will have to determine what “a hypothetical counsel capable of conducting the particular case effectively but unable or unwilling to insist on the particular high fee sometimes demanded by counsel of pre-eminent reputation” would demand for such a case. In other words, what would counsel competent to undertake the case, but not pre-eminent, charge for such a trial.

Factors relevant to the determining a brief fee will be how “heavy” the trial is, i.e. the number of issues, witnesses, experts jurisdictions et al. Deputy Master Campbell noted in Hankin that whilst this was “a difficult and complex case on liability, causation and quantum” it was “not strikingly more so in these contexts than other tragic and life changing cases which come before the courts involving personal injury and clinical negligence.” It will also be relevant whether counsel has been instructed late. If so, counsel will need to work up his/her “brief from a standing start”.

In this case leading counsel had already charged for 20.5 hours in addition to £15,000 for the mediation: these were “all matters which militate against the reasonableness of the fee [of £125,000] claimed.”

The Deputy Master also compared the fee claimed to other brief fees. It was noted that in East Sussex Fire And Rescue Service v Austin [2019] EWHC 1455 (QB) [2019] Costs LR 709: leading counsel’s brief fee was £50,000 for a 15 day trial in 2013 in a Group Action involving negligence and breach of statutory duty which the judge described as “… not, by any stretch, a typical “run of the mill” personal injury action”.
Deputy Master Campbell also reminded himself [@ 24] that: “Assessing the brief fee is not a case of working out the hours spent by Counsel and multiplying them by an hourly rate – see judgment of Lambert J in [Austin]”; and yet comments “In so far as an hourly rate has been used, it [£550] is too high and reflects a sum for pre-eminence.” The hourly rate claimed was another reason given for reducing the brief fee.

Determining an Appropriate Abatement

As noted above, this case settled 19 days before the start of trial. How close to trial a matter settles is relevant to the level of abatement. In this case it was not submitted that leading counsel had started to “work up his brief fee” as he had not started his trial preparation. However, following Bowcott, where Hallett J attributed 50% of the brief fee to what she described as the commitment element, 50% of what was determined to be a reasonable brief fee was allowed (i.e. £37,500, plus VAT).

As a rule of thumb, although the Courts will always consider each case on its own facts, if a case is listed for more than three days 50% of the brief fee is arguable to compensate the commitment element of counsel’s brief fee, despite counsel not having undertaken any work on the matter.
Deputy Master Campbell went on to deduct £10,000 to account for work undertaken by counsel to mitigate his losses. In so doing he distinguished Lewis v supra where Mitting J held the Master had erred in speculating what Counsel might have earned after the case had settled. However, in this case evidence of what counsel had done was advance so it was held, and Lewis thereby distinguished, there was “no need for any speculation.” It is submitted that this was not correct as Mitting J also held “It was irrelevant whether or not counsel could take on other work”. It is also likely that the lost refreshers, had they been accounted for in the abated fee, would have exceeded the amount counsel earned mitigating his losses.

Concluding Comments
Hankin confirms that even where a case settles over two weeks before trial and trial preparation has yet to commence an abated brief fee is payable. This compensates counsel’s “loss of chance” and the likelihood that other remunerative work will have been turned away.
In this judgment the Deputy Master first assessed what would be a reasonable brief fee for leading counsel in a case such as this. He held that because the £307,500 budgeted for the trial phase had not been allocated as between profit costs and counsels’ fees he was “not constrained” and could exercise his “own discretion” in respect of what constitutes a reasonable brief fee. This decision, if it is followed in future, will mean that unless approved budgets allocate each phase as between time costs and disbursements, the judge hearing the detailed assessment will “not be constrained” by the budgeted sums insofar as determining the level of a brief fee. It is not disputed that there was a “good reason” under CPR 3.18(b) to depart from the budget as there had not been a trial. However, in this author’s submission, the percentage abatement should have been the sole issue for the Court’s determination.

Practical Takeaways

• When budgets are approved ensure that each phase is allocated between time costs and disbursements.
• Typically, a 50% abated fee can be recovered when a case settles nearly three weeks before trial (and no preparation has been undertaken) if the case was listed for more than three days.
• The level of abatement will be determined by how much work counsel has already done to work up their brief fee and how close to trial the matter settles.
• Whilst there is no obligation to stage a brief fee it will often be wise to do so.
• Keep the other side informed as to when counsel’s brief will be delivered and the staging of fees.
• Hankin is a good case for paying parties.
• However, whether and to what extent it will or should be followed is debatable.