Botham v Niazi [2004] EWHC 2602 (QB)

[2004] EWHC 2602 (QB)

Case No 1994 B No:2126

Case No 1994 L No: 1263

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

Venue Royal Courts of Justice, Strand, London, WC2A 2LL

Date 16 November 2004

Before

THE HONOURABLE MR JUSTICE RICHARDS

Case No 1994 B No:2126

Between

Ian Terence BothamClaimant

Imran Khan Niazi (sued as Imran Khan)Defendant

Case No: 1994 L No: 1263

Between

Allan Joseph LambClaimant

Imran Khan Niazi (sued as Imran Khan)Defendant

Simeon Thrower (instructed by Meer, Care and Desai) for Claimants

James Laughland (instructed by Streathers) for Defandant

Hearing Hearing dates: 8 November 2004

Judgment

Mr Justice Richards :

[1]The application before the court arises out of defamation proceedings decided long ago. In 1994, Ian Botham and Allan Lamb each issued proceedings claiming that an article written by the defendant, Imran Khan, was defamatory. The two actions were defended initially on the ground that the article was not defamatory of the claimants. About a week before the trial in July 1996, the defence in the Botham action was re-amended so as to introduce a plea of justification. The trial of the two actions commenced on 15 July and was heard over a period of 13 days. The plea of justification was withdrawn on the ninth day of the trial. At the conclusion of the trial the remaining issues between the parties were resolved in favour of the defendant. Costs orders were made on 31 July 1996. In the Botham action, the claimant was ordered to pay the defendant’s costs, save that the defendant was ordered to pay to the claimant the costs of and occasioned by the plea of justification. In the Lamb action, where no separate issue of justification had been raised, there was a simple order that the claimant pay the defendant's costs. On the other hand, the defendant had previously been ordered to pay the costs of certain interlocutory applications in the two actions, namely(i) an application to extend time for service of the defences,

(ii) an application for leave to file further witness statements and to serve Civil Evidence Act notices,

(iii) the hearing of a summons for leave to serve a re-amended defence, and

(iv) the costs of an interlocutory appeal in relation to (iii).

[2]To this date the costs ordered to be paid as between the parties have not been the subject of taxation or detailed assessment. In October 2003, however, the solicitors now acting for the defendant formally went on record and served on the claimants’ solicitors a bill of costs and a notice of commencement of detailed assessment proceedings. That was over 7 years after the judgment. In July 2004 the claimants responded with an application that the assessment proceedings be stayed or struck out on grounds of delay, alternatively that the defendant’s costs of both actions be disallowed under CPR rule 44.14(1). The matter now before the court is the hearing of that application.

[3]Good sense would have led the parties to a settlement of the outstanding costs issues rather than a continuation of the litigation between them. The additional costs incurred by continuing to litigate could easily exceed the net amount payable to one side or the other under the costs orders that are the subject of the assessment proceedings. For a long time it was contemplated that the matter would be resolved by negotiation, but for reasons that are unclear the process foundered. It does no credit to anybody that the matter has got this far. Although I voiced these concerns at the start of the hearing and investigated whether there was room even now for sensible discussions, it was made clear to me that the parties had reached an impasse and that a ruling was required on whether the assessment proceedings can continue.

[4]In order to determine the questions before me I need first to examine the history of the matter in some detail. Much of the correspondence to which I refer was marked ‘without prejudice’, but the parties have invited the court’s attention to it without taking any point on admissibility.

The History

[5]At the time of the trial the parties' legal representation differed from their present representation. As regards solicitors, the claimants were represented by Swepstone Walsh, the defendant by Howard Cohen & Co.

[6]As already mentioned, the relevant costs order was made at the end of the trial, on 31 July 1996. Under RSC Order 62, the applicable provision at the time, proceedings for taxation should have been commenced within 3 months of the date of that order, i.e. by the end of October 1996.

[7]On 15 November 1996, after the expiry of that time limit, Howard Cohen & Co wrote to Swepstone Walsh confirming a telephone discussion earlier that day in which it had been agreed that all parties should have a general extension of time to lodge bills for taxation. The letter referred to an understanding that either side might at any time withdraw the concession (the suggested period of notice was 14 days). It also recorded an agreement that during the period of any agreed extension of time interest would not run in relation to the amount of costs ultimately payable.

[8]By a reply dated 19 November 1996, Swepstone Walsh confirmed the agreement as to a general extension of time, “to enable the parties to meet and see whether the bills can be agreed between us without the necessity of taxation”. The reply did not refer to the suggested 14 days' notice or to interest not running.

[9]It appears that on 5 February 1997 Howard Cohen & Co sent Swepstone Walsh an open letter, a copy of which is not included in the material before the court. On the same day they sent a ‘without prejudice’ letter stating that, notwithstanding the content of the open letter, they were prepared to continue the general extension of time for lodging of bills, “but of course interest would continue to run from today”. It was suggested that either party should still have the right to call for lodging of the bills on 14 days’ notice.

[10]In a letter dated 11 February 1997, in reply to one or other of the letters of 5 February, Swepstone Walsh stated that “[w]e do not agree that negotiations are now concluded and we suggest that interest should not run for the time being”.

[11]On the face of the correspondence before the court, that is how matters were left at that stage. When account is also taken, however, of the way in which the parties conducted themselves thereafter, as described below, I think it reasonably clear that they had agreed to a continued general extension of time, whether terminable at will or on 14 days’ notice, and on the basis that interest would not run during the period of the extension.

[12]In September 1997 there was a meeting between Mr Desai (representing the claimants) and Mr Nawaz (representing the defendant). Mr Desai was a friend of the claimants who at that time was representing them informally, though in March/April 1998 his firm, Meer Care & Desai, came on the record formally as their solicitors - a capacity in which the firm continues to act for them. Mr Nawaz, a chartered accountant and friend of the defendant, was acting informally as the defendant's representative. There is a note of the meeting, prepared by Mr Nawaz. I recognise that this reflects only one perspective, but I see no reason to reject the contents of this or other notes prepared by Mr Nawaz, to the extent that they are relevant to the issues before me. It appears from the note that the parties were concentrating their efforts at that time on the costs payable to their respective trial solicitors, and were trying in particular to get a reduction in those costs.

[13]There was a further meeting on 8 June 1998, involving Mr Botham as well as Mr Desai and Mr Nawaz. Mr Nawaz’s note of that meeting shows that by that time Mr Lamb and the defendant had each paid or reached agreement on their own solicitors’ costs, but the parties were still co-operating in seeking to achieve a reduction in the costs payable by Mr Botham to his solicitor. The parties were clearly proceeding on the basis that their solicitor/client costs needed to be resolved before any final resolution could be achieved of the costs position as between the claimants and defendant. This is also apparent from a subsequent letter of 29 July 1998 from Mr Desai to Mr Nawaz. Two further points may be noted about that letter. First, it referred to the need to press on but acknowledged that “the delay is not of your making”. Secondly, it evidences a linkage between the costs issue and outstanding appeals to the Court of Appeal.

[14]Appeals against the judgments entered at the trial had been lodged by both claimants. The defendant was advised that it would be futile to try to enforce the costs order until the appeals were resolved. Mr Desai’s letter of 29 July 1998 indicated that he might be prepared to recommend the withdrawal of the appeals, on terms that each side bears its own costs, with a view to tackling the outstanding costs issues together with Mr Nawaz. Further correspondence in October and November 1998 evidences Mr Desai’s continuing understanding that efforts would be made to sort out the outstanding costs issues by agreement. On 11 May 1999 there was a further meeting between Mr Desai and Mr Nawaz. Mr Nawaz’s note of the meeting states that the ostensible purpose of the meeting was to agree wording for the withdrawal of the appeal to the Court of Appeal and, from Mr Nawaz’s point of view, “to try and reach some sort of broad heads of agreement with regard to the costs of the Justification Plea so that we could move towards settlement”. Mr Desai, however, “was not prepared to enter into discussions with regard to the costs of Justification Plea as he felt he was in some difficulty initially because he had no files but more so because there had been no effective settlement with [Swepstone Walsh] and until that settlement could be reached he could not commit [Mr Botham] to the relevant costs”. In the final paragraph of the note Mr Nawaz stated that, subject to discussions with the defendant, the matter of costs might be referred to a costs draftsman or counsel “with a specific request to clarify matters so that an inordinate amount of costs is not built up to end up snatching defeat from the jaws of victory”.

[15]Following on from the discussions at the meeting of 11 May 1999, the appeals to the Court of Appeal were withdrawn by consent later in the month, with no order for costs.

[16]The costs payable by Mr Botham to his own solicitors, Swepstone Walsh, were finally determined by a detailed assessment in March 2000, in a sum of about £160,000. A copy of the final costs certificate was sent by Mr Desai to Mr Nawaz under cover of a letter dated 15 May 2000, which also recorded that in the case of Mr Lamb there was no detailed bill but a total sum of about £78,000 had been paid in full and final settlement of his liability to Swepstone Walsh. The letter stated “incidentally” that Mr Desai's costs draftsman had completed his review of the bill paid by the defendant to Howard Cohen & Co, and believed that there were in fact sums due from the defendant to the claimants. This was the first mention of the possibility that a net payment might be due from the defendant to the claimants rather than vice versa.

[17]By letter dated 20 July 2000 Mr Nawaz replied to Mr Desai’s letter of 15 May, enclosing schedules containing a detailed analysis of Swepstone Walsh’s costs, and putting forward proposals. He stated that there had been an informal discussion with leading counsel, who had suggested the possibility of applying for an interim costs order, but “I have chosen to write to you in the hope that we should be able to resolve the matter without going to litigation as we have been able to resolve the appeal to the Court of Appeal”. Unfortunately that letter was incorrectly addressed (being sent to 77-79 Park Street rather than to 97-99 Park Street) and does not appear to have reached Mr Desai at the time. The same applies to a follow-up letter sent by Mr Nawaz in October 2000 which threatened formal action if no response was received.

[18]Nothing further happened until August 2001. Around that time the defendant instructed a firm of solicitors by the name of Khan. On 6 August 2001 Messrs Khan sent the claimants’ solicitors, Meer Care & Desai, a letter containing what purported to be an offer under CPR Part 36 in respect of the outstanding costs (though the correct peg for such an offer would appear to have been CPR rule 47.19). This produced an indignant response dated 8 August 2001 from Meer Care & Desai. The response stated that Mr Nawaz’s letter of 20 July 2000 had not been received. It also pointed to the delay in the matter, took issue with the substance of the claim, and reserved the right to claim the sum of £60,000 which was alleged to be the net sum due from the defendant to the claimants. That stance was maintained in September 2001 following the eventual receipt of the schedules that had been enclosed with Mr Nawaz’s misaddressed letter of 20 July 2000.

[19]In the course of 2002 Messrs Khan instructed a costs draftsman to prepare a bill of costs on the defendant’s behalf. It appears that a draft bill was submitted to Messrs Khan in October 2002 but that it took until August 2003 before uncertainties were resolved. On 7 August 2003 Messrs Khan wrote to Meer Care & Desai to put them on notice that the defendant was arranging for his detailed bill of costs to be prepared with a view to lodging it at court. Meer Care & Desai responded by letter of 15 August 2003 contending that the assessment of costs was inappropriate after such a delay and again taking issue with the substance of the claim.

[20]It seems that during this period the defendant was becoming increasingly dissatisfied with the service he was receiving from Messrs Khan. His present solicitors, Streathers, became involved in July 2003 and went formally onto the record on 16 October 2003 in place of Messrs Khan. On the same date Streathers wrote to Meer Care & Desai, enclosing a bill of costs and a formal notice of commencement of assessment. By letter of 7 November 2003 Meer Care & Desai indicated an intention to make an application of the kind now before the court. A default costs certificate was entered on the same morning as the letter was received by Streathers, but was set aside by agreement. The claimants’ application to the court was not issued until 21 July 2004, following a limited amount of further but inconclusive correspondence between the parties.

Issues

[21]The way in which the claimant’s case was put by Mr Thrower was that the defendant’s costs of both actions should be disallowed under CPR rule 44.14(1)(a) for failure to comply with a rule of the court, namely(i) the obligation to initiate the taxation process within 3 months of the judgment or order, and/or

(ii) the obligation to certify the bill of costs in mandatory form. The point about certification was covered by an amendment to the notice of application, for which I gave permission in the course of the hearing.

[22]The notice of application advances two further grounds which were not pursued before me. One is that the defendant’s costs should be disallowed under CPR rule 44.14(1)(b) because of allegedly unreasonable conduct, in particular the delay in initiating the assessment procedure. The other is that the application to assess costs should be stayed or struck out for want of prosecution. As regards the former, Mr Thrower acknowledged that he could not bring the claimants’ case within the wording of the relevant part of the rule (which refers to unreasonable conduct before or during the proceedings which gave rise to the assessment proceedings, rather than in relation to the bringing of the assessment proceedings themselves). As regards the latter, he conceded that the case must now be considered under the specific rules of the CPR and that want of prosecution cannot appropriately be relied on as a separate ground of application in that context.

Delay in Commencement of Assessment Proceedings

[23]CPR rule 47.7, like the former RSC Order 62, requires detailed assessment proceedings to be commenced within 3 months after the date of the relevant judgment or order.

[24]Rule 47.8, headed “Sanction for failure to commence in time”, provides: “(1) Where the receiving party fails to commence detailed assessment proceedings within the period specified –(a) in rule 47.7; or

(b) by the direction of the court, the paying party may apply for an order requiring the receiving party to commence detailed assessment proceedings within such time as the court may specify. (2) On an application under paragraph (1), the court may direct that, unless the receiving party commences detailed assessment proceedings within the time specified by the court, all or part of the costs to which the receiving party would otherwise be entitled will be disallowed.

(b) section 74 of the County Courts Act 1984;

[25]The effect of rule 47.8(3) is repeated in paragraph 40.7(2) of the Part 47 Practice Direction, which states:

“Where the receiving party commences detailed assessment proceedings after the time specified in the rules but before the paying party has made an application to the court to specify a time, the only sanction which the court may impose is to disallow all or part of the interest which would otherwise be payable for the period of delay, unless the court exercises its powers under rule 44.14 (court’s powers in relation to misconduct).”

[26]The relevant parts of rule 44.14, concerning the court’s powers in relation to misconduct, are as follows:

“(1) The court may make an order under this rule where – (a) a party or his legal representative, in connection with a summary or detailed assessment, fails to comply with a rule, practice direction or court order … (2) Where paragraph (1) applies, the court may – (a) disallow all or part of the costs which are being assessed ….” (a) a party or his legal representative, in connection with a summary or detailed assessment, fails to comply with a rule, practice direction or court order … (a) disallow all or part of the costs which are being assessed ….”

[27]Counsel have unearthed very little in the way of reported cases on the application of those provisions. In McGuigan v. Tarmac Ltd, a County Court appeal reported in Current Law Year Book 2003 at para 324, there had been a breach of the similar requirement in CPR rule 47.14 to request a hearing date within 3 months of the expiry of the period for commencing detailed assessment proceedings. There was a delay of about 2 years which had resulted from oversight. It was held that “mere delay” did not trigger the sanctions in rule 44.14, but that “delay sufficiently beyond that sometimes encountered” could amount to misconduct and that this was such a case. In the absence of hard evidence of prejudice to the other side, a 25 per cent reduction in costs was substituted for the 60% reduction made by the judge below.

[28]In Re Homes Assured: Sampson v. Wilson [2002] 1 Costs LR 71 a 30% deduction was made following a delay of some 4 years, but the case concerned a legal aid taxation and was distinguished from an interpartes assessment on the ground that no issue of prejudice to third parties could arise. In a further case, of which mention was made but no copy was provided to me, a deduction of 20% is said to have been made following a delay of some 2 years.

[29]The judgment in Re Homes Assured: Sampson v. Wilson referred to the general guidance given by Lord Woolf MR in Biguzzi v. Rank Leisure plc

[1999] 1 WLR 1926

, albeit in relation to the power to strike out a statement of case rather than the present context of detailed assessment proceedings. In that judgment Lord Woolf referred to the range of sanctions available under the CPR, which in a great many situations will produce a more just result, and will therefore be more appropriate, than the draconian sanction of striking out.

[30]Mr Thrower submitted that in the present case the court should disallow all of the defendant’s costs, so as to bring an end to the assessment proceedings. It was implicit in what he said that, if the court adopted that course, there could be no question of the claimants now seeking assessment of the costs payable to them by the defendant in respect of the justification issue and interlocutory applications: the claimants’ position is that there should be an end to the litigation. It was also implicit, on the other hand, that if the court allowed the defendant’s assessment proceedings to continue, the claimants could be expected to serve notice of commencement of assessment of the costs payable to them by the defendant.

[31]The case advanced by Mr Thrower had the following main elements. First, he submitted that there was a failure by the defendant to comply with the requirement in the rules (at the time, RSC Order 62, but now contained in CPR rule 47.7) that detailed assessment proceedings be commenced within 3 months. He accepted that after the expiry of the 3 month time limit the parties agreed a general extension in order to negotiate and that, so far as appears from the documents before the court, no notice was ever given to bring the general extension to an end. But he contended that the process of negotiation was exhausted in 1997, matters were then allowed to drift, and there was certainly nothing left to discuss after Mr Botham’s solicitor and own client costs were assessed in early 2000. Yet it was not until October 2003 that notice of commencement of assessment was served. The defendant should not be allowed to have his costs assessed after such a delay. Total disallowance is a proper remedy, and one that is consistent with the overriding objective.

[32]Secondly, Mr Thrower submitted that the delay has caused the claimants prejudice because it has resulted in the unavailability of evidence and there are very great difficulties in establishing the time spent on different issues over 8 years ago, so that the claimants are unable properly to meet a detailed assessment of the defendant’s costs or to prepare an assessment of their own costs in relation to the issues decided in their favour. This has a number of strands to it: i) The claimants’ present solicitors do not have access to the case papers relating to the trial. Those papers were held by Swepstone Walsh, who acted for the claimants at trial. But Swepstone Walsh went off the record in 1998 and the firm was dissolved in September 2001. When Mr Botham's solicitor and own client costs were assessed, Mr Desai was sent the bill of costs but did not have access to the underlying materials. So, too, the costs draftsman whom he instructed to consider the bill did not have access to the underlying materials. Mr Desai states that he has tried to locate the papers, but without success. The point made is that the papers would have been obtainable had assessment proceedings been commenced on a timely basis. ii) The claimants’ leading counsel, Charles Gray QC, has been a High Court Judge for several years (having been appointed in 1998) and the defendant’s leading counsel, George Carman QC, has been dead for several years (having died in 2001). iii) Witness statements taken recently from the parties’ respective junior counsel evidence a marked difference in recollection about the significance of the justification issue. Stephen Suttle, who was junior counsel for the defendant, believes that he has disposed of his notes but states that he has a clear recollection of much of the trial. His evidence is that, compared with other issues (which he describes as complex and detailed), the plea of justification was a minor and short-lived sideshow. He estimates that the time spent on it at trial was no more than 1 to 1½ days. Justin Rushbrooke, who was junior counsel to the claimants, states that he too no longer has notes of the trial, since he does not generally keep such notes for more than 6 years. His recollection is that the plea of justification played a major role in the trial, and probably more than 50% of the time was incurred in dealing with it.

[33]Thirdly, Mr Thrower submitted that, looking at the matter broadly, the likely outcome of detailed assessment is that the defendant will be found liable to pay a net amount of costs to the claimants, rather than vice versa. That is because of the costs relating to the justification issue and the interlocutory orders – costs which the claimants are entitled to recover from the defendant and which also fall to be deducted from the costs recoverable by the defendant from the claimants. The costs of the interlocutory applications are put in the region of £20,000. The costs of the justification issue take one back into the disputed area concerning the time spent on that issue. What is said by the claimants is that, although the plea was introduced by re-amendment only shortly before the trial, it must have been the subject of detailed advice and preparation from the time when leading counsel was brought into the case, and it must have been reflected in the brief fees as well as in the ongoing costs of the time spent on the issue at trial. A very substantial reduction will therefore fall to be made from the defendant’s bill of costs to reflect the issue. In the documentary evidence, figures as high as £100,000 were mentioned. For a long time Mr Desai’s position, based on the advice of his costs draftsman, has been that there is a net sum of £60,000 or so due from the defendant to the claimants. In those circumstances it is submitted to be disproportionate to incur substantial additional expenditure in having costs draftsmen going through the detail in order to arrive at precise figures. Moreover this is not a case where an order for disallowance would deprive the defendant of costs to which he would obviously be entitled.

[34]Fourthly, Mr Thrower made various complaints about the defendant’s existing bill of costs and submitted that substantial additional costs would have to be incurred in producing separate, properly drafted bills for the two actions. One aspect of the complaints is that the defendant’s total bill in the region of £256,000 (which excludes the costs of the interlocutory applications payable by the defendant to the claimants) bears no relation to anything that was under discussion previously or to the amount actually paid by the claimant to his solicitors. As I understand it, this is said to bear upon the case in two ways. First, it highlights the fact that the solicitors now putting forward the bill of costs for the defendant have no direct knowledge of the proceedings, which reinforces the claimants’ case on prejudice: it is not surprising that the bill is wrong, but the claimants cannot now deal with it in proper detail. Secondly, the point has a bearing on the argument that detailed assessment would be a disproportionate exercise.

[35]I shall consider each of Mr Thrower’s points in turn.

[36]First, it is not in dispute that there was a breach of the requirement to commence assessment proceedings within 3 months. That would be technically sufficient to trigger the power of the court to disallow interest pursuant to rule 47.8. But the question of disallowing interest does not arise in the present case, since the defendant does not claim interest, accepting that the general extension of time was agreed between the parties on terms that interest would not run. To that extent the defendant is already suffering a penalty, albeit not one imposed by the court, for the delay. The question for the court is whether it should impose the further sanction of disallowance of costs pursuant to rule 44.14 on the ground of misconduct.

[37]Mr Laughland, for the defendant, contends that since the agreement for a general extension was made after the expiry of the original 3 month time limit, the claimants must be taken to have waived any objection to the breach and cannot now rely upon it. I do not accept that the agreement amounted to a total waiver, so as to preclude any reliance on the breach irrespective of what happened thereafter. On the other hand, I do accept that the agreement is highly material to the court’s assessment of whether the delay in commencing detailed assessment proceedings was of such a character as to amount to misconduct for which a sanction should be imposed. On that issue I regard the following matters as particularly material: i) The general extension was agreed with a view to a negotiated settlement which would avoid the need for a detailed assessment. I reject Mr Thrower’s submission that the process of negotiation was exhausted in 1997. In my judgment the possibility of a negotiated settlement was still in the contemplation of the parties until at least 2000. The outstanding appeals (withdrawn by consent in 1999) and the need to resolve the disputes over solicitor/client costs (a process which was not complete until the assessment of Mr Botham’s solicitor/client costs in early 2000) stood in the way of such a settlement. Mr Nawaz’s letter of 20 July 2000, although misaddressed, evidences a continuing attempt to achieve a settlement. It was only in the chasing letter of 10 October 2000, also misaddressed, that the possibility of resort to formal action was mentioned. ii) One could reasonably allow the defendant until early 2001 to have taken further action in the absence of any response to the letters of 20 July and 10 October 2001. Thereafter, however, it seems to me that there was culpable delay on the part of the defendant, first in waiting until August 2001 before Messrs Khan sent a formal letter and then in taking a further two years to get a bill of costs drafted and to serve a notice of commencement. iii) On the other hand, at no time did the claimants take any step to speed things along. They did not give notice bringing the general extension to an end. Nor did they avail themselves of the right to apply under rule 47.8(1) for an order requiring the defendant to commence detailed assessment proceedings within a specified period. When faced with a formal approach in 2001 they relied on the delay to date and reserved the right to claim the net sum of £60,000 from the defendant. Their approach was to try to avoid detailed assessment altogether rather than to avoid any further delay in the commencement of assessment proceedings. Even when notice of commencement was served in October 2003, the claimants waited until July 2004 before issuing the present application. All that weighs in the balance when deciding whether the defendant’s delay in the latter part of the total period should result in an order disallowing his costs. This is very far from being a case where all the blame lies on one side.

[38]The second of Mr Thrower’s main points, namely prejudice, is closely linked to the first: in assessing the significance of the delay, it is necessary to consider what effect it has had upon the claimant’s ability to deal with the defendant’s bill of costs.

[39]Mr Laughland submitted that a fair assessment was still possible. All the documents which form the basis of the bill of costs are available for scrutiny by the costs judge. On a standard basis assessment, any doubts will be resolved in favour of the claimants as paying parties. The solicitor who acted for the defendant at the trial is available to give such further information as may be required. The solicitor who acted for the claimants is still in practice (with a different firm) and can also be asked to provide assistance if required. Moreover the position with regard to his availability is no different from that which would have existed if assessment proceedings had been commenced many years ago. Junior counsel for both sides are available, have already given initial witness statements and can give oral evidence if necessary. The fact that they have different recollections of the significance of the justification issue does not mean that the costs judge will be unable to form a view on the question.

[40]Mr Laughland accepted that if Swepstone Walsh’s files are not available to the claimants it will present the claimants with some difficulties in cross-referencing the work claimed in the defendant’s bill with the work done on the claimants’ side; but that difficulty does not render a detailed assessment unattainable. It was, however, not accepted that Swepstone Walsh’s files are in fact unavailable. Enquiries have been made by Mr Desai, but the evidence does not show that all possibilities have been fully explored. If the files cannot be located, then that is not the fault of the defendant or attributable to culpable delay on the part of the defendant. Meer Care & Desai went onto the record as the claimants’ solicitors in 1998 and were acting for the claimants at the time when Mr Botham’s solicitor and own client costs were determined. Mr Desai had been involved from an early stage in the negotiations over the inter partes costs. It was known that those negotiations had not been finalised, and the possibility of assessment proceedings remained. Mr Desai was even asserting that a net sum was due from the defendant to the claimants. Meer Care & Desai ought to have obtained the relevant files from Swepstone Walsh once Swepstone Walsh’s lien on the files came to an end on payment of their costs by their clients.

[41]In my judgment those various points have considerable force in them. I do not consider that the delay has prevented a fair assessment of the defendant’s costs, though I accept that the process will be more difficult than if it had been carried out on a timely basis. The primary disadvantage that the claimants are under arises from the lack of the Swepstone Walsh files. But that is a greater disadvantage in the preparation of the claimants’ own bill of costs for detailed assessment than in dealing with the defendant’s bill of costs in the existing assessment proceedings. Moreover, I am not satisfied that all reasonable efforts have yet been made to track down the files. Most importantly, even if they do prove to have been lost or destroyed, that is not something for which the defendant should be blamed or penalised. It would have been an obvious precaution to obtain them from Swepstone Walsh in 2000, well before Swepstone Walsh was dissolved. Mr Desai and his firm were involved from an early date and were in a position to reach an informed judgment on what was needed for the purpose of finalising negotiations over costs or dealing with assessment proceedings if the negotiations failed.

[42]On Mr Thrower’s third main point, concerning proportionality, I am wholly unpersuaded by his argument that the defendant stands to gain nothing from proceeding with detailed assessment. The defendant would not be pursuing the matter if he thought that he was unlikely to recover substantial costs at the end of the day. The defendant may of course be mistaken. I take account of the figures put forward by the claimants and I cannot exclude the possibility that there may be a net balance due to them (though, if that were so, it would almost certainly involve a payment by Mr Lamb to the defendant and a payment by the defendant to Mr Botham, since only Mr Botham was involved in the justification issue). But it impossible for me to reach any concluded view on these matters, in particular on the proportion of work attributable to the justification issue. That must be a matter for the costs judge to determine if the detailed assessment goes ahead. I am troubled by the prospect of substantial additional costs being incurred on the assessment proceedings themselves, but I cannot say that those proceedings are unlikely to produce a significant net benefit to the defendant or that considerations of proportionality ought therefore to lead me to deny the opportunity to pursue the matter.

[43]The fourth main point raised by Mr Thrower, concerning the size and nature of the defendant’s costs bill, raises issues best considered separately in the context of the claimants’ case that the bill of costs is defective. It suffices to say here that the matters advanced in this connection do not seem to me to add materially to the arguments considered above or to have any material effect on my conclusion.

[44]The conclusion I reach on this issue is that the delay, although deeply regrettable, ought not in the circumstances to cause me to impose any greater sanction than that already conceded by the defendant in the form of disallowance of interest. There has been, as I have said, some culpability on the part of the defendant, but in my view the claimants are as much to blame for the situation in which the parties now find themselves and, to the extent that the claimants have suffered any prejudice, greater responsibility for that lies with them than with the defendant. In the circumstances it would not be just to deny the defendant the chance to recover the assessed costs to which he would otherwise be entitled. Tempting though it is to bring this litigation to an end, disallowance of costs would in my view be a disproportionate sanction. I have considered whether partial disallowance would be appropriate, but have decided against it for the same reasons and because it would not stop the assessment proceedings or, therefore, meet the claimants’ basic objections to the continuance of those proceedings.

[45]I turn to consider whether the alleged defects in the defendant’s bill of costs should lead me to any different conclusion.

Alleged Defects in the Bill of Costs

[46]The form and content of bills of costs is dealt with in section 4 of the Part 43 Practice Direction. Paragraph 4.1 provides that a bill of costs “may consist of such of the following sections as may be appropriate”, including “(6) the certificates referred to in paragraph 4.15”. Paragraph 4.15 provides that the bill of costs “must contain such of the certificates, the texts of which are set out in Precedent F of the Schedule of Costs Precedents annexed to this Practice Direction, as are appropriate”. Precedent F specifies that an appropriate certificate under heading (1), “Certificate as to accuracy”, is required in all cases. The relevant part of the text under heading (1) is as follows:

“I certify that the bill is both accurate and complete and …  (other cases where costs are claimed for work done by a solicitor) [in respect of Part(s) … of the bill] the costs claimed herein do not exceed the costs which the receiving party is required to pay me/my firm.” [in respect of Part(s) … of the bill] the costs claimed herein do not exceed the costs which the receiving party is required to pay me/my firm.”

[47]In the bill of costs submitted by the defendant, the standard wording of the last part of that certificate has been amended in manuscript so as to certify that: “… the costs claimed herein do not exceed £175,163.65 paid in total by the receiving party”.

[48]Mr Thrower took two main points in relation to the form of the bill. He seemed initially to contend that these points went to the validity of the bill and that assessment proceedings could not lawfully be continued on the basis of them. But in his amendment to the application notice, for which he sought and obtained permission in the course of his reply, the matter is put simply in terms of failure to comply with a relevant rule, so as to engage rule 44.14 concerning the court’s powers in relation to misconduct.

[49]First, Mr Thrower contrasted the certificate with the total amount of costs set out in the body of the bill, namely £256,855.16 (to which must be added the sum of about £20,000 for the costs of the interlocutory applications which are excluded from the bill). He submitted that the bill plainly far exceeds, and bears no relation to, the amount paid or required to be paid by the defendant to his solicitors. It is impossible to tie in particular items in the bill with the amount paid by the defendant, which makes it very difficult to put forward proper points of dispute. In any event, the fact that the bill is not certified in the prescribed form and exceeds the amount payable by the defendant amounts to a breach of the rules. As to the importance of accuracy in the certificate, Mr Thrower referred to Hoffmann on Civil Costs, 3rd edition (2003), paragraph 4-06 of which cites a passage from Bailey v. IBC Vehicles Ltd

[1998] 3 All ER 570

stating that “the signature of the bill of costs under the rules is effectively the certificate of an officer of the Court that the receiving party’s solicitors are not seeking to recover in relation to any item more than they have agreed to charge the client”.

[50]The second point taken in relation to the bill is that there were two actions and a separate bill is required for each action. The bill submitted by the defendants does not distinguish between the costs attributable to Mr Botham’s action and those attributable to Mr Lamb’s action.

[51]I am unpersuaded by Mr Thrower’s submissions on this issue, which seem to me to be highly artificial. I accept the points made by Mr Laughland, which may be summarised as follows: i) Any suggestion that the precise wording of the certificate is absolute and inviolate is plainly wrong. Since the defendant’s present solicitors did not act for him at the time of the trial, and the payment of costs by the defendant was to the solicitors who did act for him at that time, there would in any event have to be an amendment to the standard wording of the relevant certificate. The standard wording refers to the costs which the receiving party is required to pay “me/my firm”. The reference to “me/my firm” would have to be deleted or otherwise amended so as to reflect the true position in this case. Amendments so as to reflect the true position must be within the intention of the rules. ii) The purpose of the certificate is to ensure that there is no breach of the indemnity principle. The certificate in this case is consistent with that purpose, in that it specifies the amount paid by the defendant to his solicitors (£175,163.65) and makes clear that the defendant does not claim more than that amount. Although, for reasons explained below, the detailed figures in the bill exceed that amount, the clear intention is that the amount specified in the certificate is the maximum claimed. iii) To have drafted the bill in such a way that the detailed figures added up to the total paid by the defendant to his solicitor would have been a complete fiction, since the defendant’s liability to his solicitors was settled in a global amount rather than by revision of hourly rates or of time spent or by deduction of specific items. (Mr Thrower pointed to passages in Mr Nawaz’s notes in support of a suggestion that the total was arrived at by deduction of specific items from a draft bill which can be inferred to have been in the sum of approximately £215,000. In my view, however, there is nothing to substantiate the proposition that the sum paid by the defendant was anything other than a global figure.) iv) Accordingly the bill was drawn up by reference to the original hourly rates, time spent and other items as shown by the attendance notes etc., so as to determine the total that could have been charged to the defendant by his solicitors. It will be for the costs judge to determine whether the figures are sustainable and what deduction falls to be made in respect of the justification issue and any other matters in respect of which the defendant is not entitled to be paid his costs by the claimants. If, say, that results in a reduction of 20% in the total amount included in the bill, a corresponding reduction of 20% will then fall to be made from the actual figure of £175,163.65 paid by the defendant to his solicitors. The figure so reduced will be the total amount payable by the claimants. v) The bill is expressed to relate to the two actions but does not seek to allocate costs between them because the two actions were prepared and tried together, many of the costs were common to both, and any apportionment by the defendant so as to produce separate bills would have been contentious and open to a complaint of arbitrariness. The only certain starting point is the total sum of £175,163.65 paid by the defendant to his solicitors in respect of the two actions combined. The appropriate course is to invite a finding from the costs judge as to the correct apportionment in the light of submissions from all parties.

[52]Neither side has been able to point to any authority on the issue, but the manner in which the bill has been drawn up and the claim has been made seems to me to be a sensible, pragmatic approach which pays proper respect to the indemnity principle and is calculated to minimise the risk of injustice as between the various parties concerned.

[53]For those reasons I consider the bill to be valid and in compliance with the rules. Even if there were a technical non-compliance, it would have a reasonable justification and would not be a sound basis for the imposition of sanctions for misconduct pursuant to rule 44.14(1)(a).

[54]Consideration of this issue does not, therefore, cause me to alter the conclusion I have expressed above in the context of the delay issue.

Other matters

[55]The notice of application seeks in the alternative a direction in respect of the assessment of costs awarded to the claimants. I shall consider that together with any other consequential matters when I hand down this judgment.

Conclusion

[56]For the reasons I have given, the claimants’ application is dismissed. The assessment proceedings must be allowed to continue, though it will be clear from what I have said near the beginning of this judgment that in my view it would be folly for the parties to incur yet further substantial expenditure on the continuation of those proceedings rather than striving to reach a belated negotiated settlement of the whole matter.