Lord Ordinary repels objections to Auditor’s decision to disallow new counsel reading-in fees in personal injury expenses

About this case:

• Citation:
  [2023] CSOH 51
• Judgment:
  External link
• Court:
  Court of Session Outer House
• Judge:
  Lord Braid

Samantha Maguire settled her claim against Black Isle Fire Systems Ltd and their insurer Royal & Sun Alliance Insurance Plc in March 2022 for a substantial sum and the expenses of process. However, the Auditor disallowed fees for “revising” an Immediate Needs Assessment Report and a reading-in fee charged by junior counsel.

The case was heard by Lord Braid, with Springham KC appearing for the pursuer and M Hastings, solicitor advocate, for the defenders.

Vagary of litigation

On 18 October 2015, the pursuer suffered catastrophic injuries in a road traffic accident when a van in which she was a front-seat passenger careered off the A835 Ullapool to Torre road and overturned. An action was raised in October 2018, which settled with an interlocutor pronounced on 30 March 2022 awarding the pursuer a substantial sum in damages, together with the expenses of process as taxed.

In 2016, an Immediate Needs Assessment Report was instructed jointly by the pursuer’s solicitors and the second defender. Following the INA, monthly case management reports were provided, funded by the second defender, providing updates on the pursuer’s rehabilitation. The pursuer’s expenses account included charges for “revising” parts of the INA, which amounted to £1,326, plus a further £7,099 for revising the monthly reports.

Additionally, the first junior counsel instructed by the pursuer was appointed to the Crown Office in 2021, necessitating new counsel, who charged a “reading-in” fee for all papers associated with the case. This was included as an outlay of £2,250 plus VAT. The Auditor disallowed all of these charges save for six of the case management charges for which he allowed a half-hour perusal fee. Regarding the reading-in fee, he did not consider it reasonable for the paying party to be responsible for duplication of work.

The pursuer objected to the abatement of the charges on the basis that the reports were obtained jointly pursuant to an agreement between the pursuer and RSA and wholly funded by RSA. It was, said the pursuer, illogical for RSA to pay for the reports and at the same time object to the pursuer’s solicitors’ fee for reading them. In respect of the reading-in fee, it was simply a vagary of litigation that a replacement junior counsel had to be instructed, for which the paying party should bear the cost.

Tolerably clear

In his decision, Lord Braid began: “There is, at first blush, a contradiction or at least a logical disconnect in the Auditor’s reasoning, inasmuch as he states that perusal of the reports was reasonable for conducting the cause in a proper manner, and ‘accordingly’ abated the cost of perusing the majority of the case management reports obtained after the litigation commenced, allowing only a restricted fee for perusing the INA and the other pre-litigation reports.”

However, he went on to say: “Nonetheless, it is tolerably clear, reading the minute as a whole, what the Auditor meant: that, in principle, it was reasonable to charge for perusal of the reports but that the number charged for was unreasonable and excessive.”

Explaining his decision further, he said: “The Auditor was aware, from the submissions made to him, of the sort of information that the monthly reports contained, and he did see the INA. I have therefore concluded that he was entitled to reach the view, based upon his experience of taxing accounts in personal injury actions, and without seeing the case management reports, that to conduct the case in a proper manner, it was reasonable to obtain and peruse the case management reports only on a half-yearly basis.”

Turning to the reading-in fee, Lord Braid added: “The Auditor does appear to hold a party’s solicitors to an impossibly high standard when instructing counsel, particularly when regard is had to the length of most litigations, and the impossibility of knowing what fate might have in store for any chosen counsel. However, the nub of the Auditor’s decision is to be found in a subsequent sentence in his minute, where he states that he did not consider it reasonable that the paying party should be responsible for the duplication of work caused by the change in counsel.”

He concluded: “While it may well be that different auditors would reach a different conclusion, I cannot conclude that a decision that the paying party should not pay for a duplication of work is one which no reasonable auditor would have reached. To call it a vagary of litigation – as it is – takes one nowhere, since that begs the question as to whether it is a vagary for which the paying party should pay, or is an irrecoverable agent-client expense. Again, this was a decision that the Auditor was entitled to reach.”

The Note of Objections was therefore repelled, and the Auditor’s report sustained.