Mesothelioma litigation — Leading Counsel’s fees disallowed on costs assessment

By way of judgment published on 22 March 2024, Mrs Justice Yip, assisted by Costs Judge Nagalingam, rejected the appeal against a decision of Deputy Costs Judge Joseph, to disallow Leading Counsel’s fees when determining the appellant’s recoverable costs on detailed assessment.  

Facts

The underlying litigation, where liability was denied, was compromised on 7 February 2022, in the sum of £75,000 damages plus costs payable on a standard basis. The claim had a value of approximately £115,000 on a full liability basis. The case had been listed for trial commencing on 2 March 2022 as a Category C listing by Master Davison.

The claimant’s total costs were claimed at £178,200, which included two abated brief fees of Mr Steinberg KC, at £25,000 plus success fee uplift of 27.5% plus VAT and Ms Scott of £12,500 plus uplift and VAT.

Deputy Costs Judge Joseph disallowed the fees of Leading Counsel, holding that they were not reasonable and proportionate, having regard to all the circumstances.

He expressed the view that he was troubled by the absence of any explanation from the claimant’s instructing solicitor as to why it was deemed necessary to instruct Leading Counsel in January/February prior to the trial listed for the beginning of March, incurring an additional liability of £50,000 (Leading Counsel’s full brief fee).

He did however consider a statement submitted by Mr Steinberg KC which included the comment that:

“Whether or not there was an issue of principle, (it was common in all mesothelioma cases), for the parties to instruct Leading Counsel”. That submission was not adopted in the appeal and was described by Mrs Justice Yip in her judgment as: “a substantial overstatement”.

The appeal

The appellant contended that it was “manifestly reasonable” for Leading Counsel to be instructed bearing in mind the importance of the matter to the claimant, its value and complexity. It was also contended that had the case proceeded to a full trial, it was likely to involve similar arguments to those ventilated in the case of Bannister v Freemans, where the court held that the claimant’s exposure was ‘de minimis’ and could not be viewed as resulting in a material increase in the risk of the claimant developing mesothelioma.

The judgment

Although accepting that the instant case did raise “potentially difficult questions concerning the medical evidence and legal issues”, it was apparent that neither Master Davison nor the appellant’s legal advisors viewed the case as one of particular complexity at the “show cause” hearing and that it was the sort of case routinely covered by Junior Counsel.

In recognising that any costs appeal faces a high bar, applying SCT Finance v  Bolton [2003], Mrs Justice Yip held that she had not identified any material flaw in the deputy costs judge’s reasoning and that this was a “careful and balanced judgment”, concluding that the costs judge “did not err in the exercise of his discretion”.

Commentary

Compensators have become increasingly concerned over rising levels of claimants’ solicitors’ costs and disbursements in mesothelioma cases — often reaching levels which are disproportionate to the damages recovered.

However, defendant practitioners would be wise not to read too deeply into the outcome of the appeal — Mrs Justice Yip was at pains to stress that it did not set any general principles in disallowing Leading Counsel’s fees in mesothelioma litigation and issued the following warning:

“I make it clear that any attempt by insurers to argue that Bannister should carry weight at the stage of negotiating damages but not when it comes to costs would be deprecated”.

The judge’s conclusion was reached primarily on the basis that the costs judge did not err in the exercise of his discretion.

Nonetheless, the underlying judgment provides evidence that costs challenges in appropriate cases can and should be mounted. Given the continued absence of cost budgeting in mesothelioma cases, challenges to claimants’ costs on detailed assessment remain the only way to temper rising levels of costs and disbursements.