Inner House refuses appeal against Auditor’s decision not to allow full expenses for English solicitors in foreign accident claim

About this case:

• Citation:
  [2023] CSIH 30
• Judgment:
  External link
• Court:
  Court of Session Inner House
• Judge:
  Lord Carloway

Margaret Kirkwood, who settled her action with defenders Thelem Assurances in March 2020, argued that the Auditor’s finding that it was unreasonable of her to instruct English solicitors was made in error. The defenders and respondents submitted that the Auditor had correctly exercised his discretion and had applied the correct test.

The appeal was heard by the Lord President, Lord Carloway, together with Lord Tyre and Lord Boyd of Duncansby. Smith KC appeared for the reclaimer and Middleton KC for the respondents.

Vast experience

In 2015, the pursuer was involved in a road traffic accident in France. She instructed the Birmingham offices of Irwin Mitchell, solicitors, to pursue her claim. Irwin Mitchell then engaged an Edinburgh firm, Blacklocks, to assist them as local agents in Scotland. The action settled in March 2020 and the defenders were found liable to pay the pursuer’s legal expenses.

An account for taxation was lodged by Blacklocks containing £8,761 of their own fees and outlays of just over £250,000, the vast majority of which was contained in an account of Irwin Mitchell’s fees and outlays. The defenders asked the Auditor to disallow Irwin Mitchell’s fees on the grounds that it was not reasonable to instruct English solicitors in this case. The Auditor agreed with the defenders and allowed a total sum of £136,783.20, which included some but not all of Irwin Mitchell’s outlays.

The pursuer challenged the Auditor’s decision in the Outer House, where the Lord Ordinary held that he had not exercised his discretion unreasonably. It was not immediately apparent that it was reasonable for conducting the cause in a proper manner to instruct English solicitors, and although the pursuer was still entitled to do so it did not follow that the expense of doing so should fall on the defenders.

Counsel for the pursuer submitted that her instruction of Irwin Mitchell, a firm with vast experience of litigating claims arising from foreign accidents, could not be said to be unreasonable in the circumstances. The Auditor ought to have assessed whether the amounts charged for each item were reasonable rather than taxing off their fees in their entirety. Further, his conclusion that, as a generality, English solicitors charged more than Scottish solicitors, and that therefore it was not reasonable to instruct them, was manifestly ill-founded.

Nigh impossible task

Lord Carloway, delivering the opinion of the court, observed: “[It] is not to say that in a Scottish litigation the fees of English solicitors for particular pieces of work are not recoverable. Of course they are. Normally, however, the work has to have been instructed by the Scottish solicitors who are responsible for the general conduct of the litigation, in this case Blacklocks. There is no indication in this case that Blacklocks gave any thought to, or were even aware of, the work carried out by Irwin Mitchell.”

Addressing whether the Auditor had carried out his task correctly, he said: “With English solicitors’ fees, those allowed in English practice would normally be appropriate. The Auditor may have to make suitable inquiries in that regard. In order to enable an exercise of this type to be carried out, the Scottish agents would have to separate out, into specific outlays on their account, those items, for which it was reasonable to instruct English solicitors, from those concerned with the general conduct of the cause.”

He continued: “There was no attempt to do that here. In these circumstance it was not for the Auditor to carry out such a time consuming, if not well nigh impossible, task by taxing Irwin Mitchell’s account by looking at each individual item.”

On the principle that English solicitors’ fees were generally higher, Lord Carloway said: “As in School and Nursery Milk Alliance Ptnrs (2023), the Auditor had regard to the higher rates which are generally charged by solicitors in England. The Auditor has extensive experience of such matters. He does not need extraneous material or evidence to support this. It will be obvious from the charges in the English solicitors’ account. Here it was manifestly clear from the rates on the first page.”

He concluded: “Even if the court required to consider whether it was reasonable to instruct English agents to carry out particular items of work, like the Auditor, the court would have quickly agreed with the Auditor’s view that the significantly higher charge out rates in Irwin Mitchell’s account militated strongly against this being so. There is no basis upon which the Auditor’s approach, or the Lord Ordinary’s reasoning, can be faulted.”

The reclaiming motion was therefore refused.