Outer House rules woman who instructed English solicitors for Scottish damages case cannot recover full account in expenses

Outer House rules woman who instructed English solicitors for Scottish damages case cannot recover full account in expenses

A Lord Ordinary has ruled that a woman who instructed English solicitors in order to conduct litigation in the Court of Session could not charge their £250,000 account to the unsuccessful defender.

Thelem Assurances, the defender in the action raised by Dr Margaret Kirkwood, objected to the original account, which led to a determination by the Auditor that it had not been reasonable to instruct foreign solicitors in the action. The pursuer challenged this determination on the ground that the Auditor had erred in law.

The case was heard by Lord Menzies in the Outer House of the Court of Session, with Smith QC appearing for the pursuer and Middleton QC for the defenders.

Unreasonably high

The action arose from an injury sustained by the pursuer after she was knocked down by a motorist while on holiday in France in 2015. She instructed English solicitors Irwin Mitchell of Birmingham to conduct the litigation, using a Scottish firm, Blacklocks, to attend to procedural matters. The action was settled in March 2020 and the defenders found liable for the pursuer’s expenses the following October.

The account lodged by Blacklocks with the Auditor comprised their fee of around £8,670 plus outlays of £250,177.35 relating to Irwin Mitchell’s account prepared on the English equivalent of the Scottish “agent and client” basis. A preliminary point of objection was lodged by the defenders to determine that this portion of the account be disallowed as it was not reasonable in the proper conduct of the litigation for the pursuer to have instructed the English firm.

It was submitted for the pursuer that the Auditor had not considered whether the charges were reasonable and that he had proceeded on the assumption that English solicitors’ fees would be unreasonably high. This amounted to an unreasonable exercise of his discretion. The pursuer was entitled to choose her solicitor, the Auditor then was able to tax off or abate individual items if he considered the charge to be too high.

For the defenders it was submitted that what the Auditor had decided was not a general principle but that in the present case none of Irwin Mitchell’s fees had been reasonably incurred. In the present case he had decided that the English solicitor was not properly employed in the Scottish litigation, and he had not been required to look at the individual charges for that reason.

Nothing to gain

In his decision, Lord Menzies observed: “I can find no error in law in the Auditor’s report. In the exercise of his wide discretion, he took the view on the preliminary point of objection that the charges of English solicitors did not meet the test in rule of court 42.10(1), which was the relevant test for the purposes of this action. The rule provides that ‘only such expenses as are reasonable for conducting the cause in a proper manner shall be allowed’.”

He continued: “As the Auditor noted, the pursuer had permanent residence in Scotland, the accident was in France, and a Scottish firm of solicitors was initially instructed. The action was raised, and remained, in the Court of Session. It is not immediately apparent that it was reasonable for conducting the cause in a proper manner that the pursuer should instruct English solicitors. Of course she was entitled to do so, but it does not follow that the expense of doing so should fall on the defenders.”

Lord Menzies noted that there was no general principle against instructing English solicitors, explaining: “[The Auditor] was not persuaded that there was anything gained in respect of the specialism of the English agents that was not readily available with a number of Scottish based agents. For these reasons, he was not satisfied that the instruction of English agents was reasonable for conducting the cause in a proper manner.”

He concluded: “As the defenders submitted, if the charges by English agents, which were set out as outlays in Blacklocks’ account of expenses, were allowed, this would have the effect that while the defenders have only been found liable to pay the pursuer’s expenses on a party and party basis, the pursuer would be able to recover from the defenders the charges of English solicitors effectively on an agent and client basis. In all these circumstances I do not consider that the Auditor’s decision can be categorised as unreasonable.”

Lord Menzies therefore refused the pursuer’s application for the objection to be sustained.

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