Adjudication Principles

Table of Contents

Overview

A Legal Costs Adjudicator shall apply the following principles in adjudicating on a bill of costs pursuant to an application pursuant to section 154 :

that the costs have been reasonably incurred, and
that the costs are reasonable in amount.

Costs shall include VAT only when such sums are not recoverable by the person in whose favour the order is made.

Legal Costs Adjudicator are to have regard to the statutory guidelines published under the 2015 Act.

Principles

The principles relating to legal costs shall apply to the adjudication of a bill of costs by a Legal Costs Adjudicator. The principles for costs are that the costs have been reasonably incurred, and that the costs are reasonable in amount. In determining whether the costs are reasonable each of the following matters must be considered, where applicable:

the complexity and novelty of the issues involved in the legal work;
the skill or specialised knowledge relevant to the matter which the legal practitioner has applied to the matter;
the time and labour that the legal practitioner has reasonably expended on the matter;
the urgency attached to the matter by the client and whether this requires or required the legal practitioner to give priority to that matter over other matters;
the place and circumstances in which the matter was transacted;
the number, importance and complexity of the documents that the legal practitioner was required to draft, prepare or examine;
where money, property or an interest in property is involved, the amount of the money, or the value of the property or the interest in the property concerned;
whether or not there is an agreement to limit the liability of the legal practitioner where permitted;
whether or not the legal practitioner necessarily undertook research or investigative work and, if so, the timescale within which such work was required to be completed;
the use and costs of expert witnesses or other expertise engaged by the legal practitioner and whether such costs were necessary and reasonable.

Application to Facts

In determining an application for the adjudication of legal costs, the Legal Costs Adjudicator shall, to the extent which he or she considers it necessary to do so, consider and have regard to the entire case or matter to which the adjudication relates and the context in which the costs arise.

In particular, the Legal Costs Adjudicator shall, as respects a matter or item the subject of the application

verify that the matter or item represents work that was actually done;
determine whether or not in the circumstances it was appropriate that a charge be made for the work concerned or the disbursement concerned;
determine what a fair and reasonable charge for that work or disbursement would be in the circumstances, and
determine whether or not the costs relating to the matter or item concerned were reasonably incurred.

In so doing, the Legal Costs Adjudicator shall, so far as reasonably practicable, ascertain, in relation to work (including work to which a disbursement relates)—

the nature, extent and value of the work;
who carried out the work, and
the time taken to carry out the work.

In the application an adjudication relating to a bill of costs as between a legal practitioner and his or her client, the Legal Costs Adjudicator shall have regard to an agreement (if any) between the legal practitioner and the client in relation to the matter concerned.

Determination

A Legal Costs Adjudicator, having considered an application shall make a determination in respect of it. A determination shall, as soon as practicable after it is made, be furnished to the parties to the adjudication. In accordance with the principles relating to legal costs specified, a Legal Costs Adjudicator shall confirm the charge in respect of an item of legal costs the subject of the application if, having regard to the matters that he or she considered and ascertained, he or she considers that—

charging in respect of the item is fair and reasonable in the circumstances, and
the amount charged in the bill of costs in respect of that item is fair and reasonable in the circumstances.

A Legal Costs Adjudicator shall, if he or she determines that it is fair and reasonable to charge an amount in respect of an item but that the amount of the charge in respect of the item is not fair and reasonable, determine a different amount to be charged in respect of that item.

Proof & Costs Notice

A Legal Costs Adjudicator shall not confirm an amount for a disbursement unless—

there is a valid voucher or receipt in respect of the disbursement, or
the parties have agreed, and the Legal Costs Adjudicator is satisfied, that such a voucher or receipt is not required.

A Legal Costs Adjudicator shall not confirm a charge in respect of a matter or item if the matter or item is not included in a S. 150 cost notice , as the case may be, is not the subject of a fixed cost agreement, unless the Legal Costs Adjudicator is of the opinion that to disallow the matter or item would create an injustice between the parties.

If a Legal Costs Adjudicator is of the opinion that a party to the application has neglected or refused to provide documents, and that the refusal or neglect would likely be prejudicial to the interests of one or more of the other parties, the Legal Costs Adjudicator shall, in order to minimise the prejudice to those interests—

determine the application to the extent possible in the circumstances, and
determine that only a nominal amount is to be payable to the party who has neglected or refused to provide the required documentation.

Direction to Practitioner

Where any bill of costs is ordered to be adjudicated for the purpose of being paid or raised out of any fund or property, the Legal Costs Adjudicator may, in his discretion, require the solicitor to give notice to his clients or such of them as the Legal Costs Adjudicator shall direct, and may suspend the adjudication until such notice has been given. Such notice shall state that the bill of costs has been referred to the Legal Costs Adjudicator and the date and hour fixed by the Legal Costs Adjudicator for the adjudication to proceed, and shall also state that the party to whom such notice is addressed is entitled to appear to be represented to oppose the allowances on adjudication.

When a person in whose favour an order to pay costs has been made or other person entitled to costs refuses or neglects to deliver a bill of costs to the person liable to pay, and thereby prejudices that person or any other party, the Legal Costs Adjudicator may certify the costs of the other parties, and certify such refusal or neglect, or may allow the person so refusing or neglecting a nominal or other sum for such costs, so as to prevent any other party being prejudiced by such refusal or neglect.

Where the plaintiff is directed to pay to the defendant the costs of the case, the costs occasioned to a defendant by any amendment of the plaintiff’s pleadings shall be deemed to be part of such defendant’s costs in the cause (except as to any amendment which shall appear to have been rendered necessary by the default of such defendant), but there shall be deducted from such costs any sum which may have been paid by the plaintiff in respect of any amendment.

Discretionary Sums

Where in the scales of costs in Appendix W there is entered either a minimum and a maximum sum, or the word “discretionary”, the amount of costs to be allowed in respect of that item shall, subject to any order of the Court, be in the discretion of the Legal Costs Adjudicator, within the limits of the sums so entered (if any).

As to all fees and allowances not it shall be in the discretion of the Legal Costs Adjudicator to disallow the same in whole or in part. In exercising his discretion in relation to any item, the Legal Costs Adjudicator shall have regard to the matters set out in Schedule 1 to the 2015 Act.

Delay

Where, in proceedings before the Legal Costs Adjudicator, any party is guilty of neglect or delay, or puts any other party to any unnecessary or improper expense relative to such proceedings, the Legal Costs Adjudicator may, without limitation of any other power available to him, direct such party or his legal practitioner to pay the reasonable costs occasioned by such neglect or delay. Such costs may be deducted from or, as the case may be, added to and included in the amount of the costs determined to be due on adjudication.

Register & Certificate

Legal Costs Adjudicator is to maintain a register of determinations which are available online. The paper copy of the register is available for inspection by interested parties during office hours.

In any case in which costs are directed to be paid by any order, and the same are subsequently determined and certified, the party entitled to such costs may, after the determination has taken effect in accordance with section 158 of the 2015 Act, upon production of such order, the Legal Costs Adjudicator’s certificate of determination of the amount thereof, and proof that such costs are not the subject of a consideration under section 160 or a review under section 161 of the 2015 Act, have an order of execution for the payment of the certified amount of such costs.