Costs

Carawaystick

Digital Rights Ireland were involved in a case between ISPs and record labels

They got a bill for costs of (off the top of my head €23k
They appealed this and the bill was reduced to (guess) €13k
But the appeal cost them another ~€1900

My queries are
If lawyers say "our costs are x" and the taxing master decides they are considerably lower
Is this not a fraud of some kind, like a mechanic billing an unwary motorist for spurious work
It definitely seems very sharp practise

Secondly, would the costs of the appeal on costs not go with the appeal? Where the costs ended up much lower than the original claim? There seems to be an economic incentive to overcharge by the costs of a cost appeal, as it won't be worth appealing this amount...

Pro Hoc Vice

No it's not a fraud. There are two types of costs "Solicitor Client" and "party and party" costs. The taxing masters sets the party and party costs that being the amount the other person must pay to the wining side.

Say you want to use a certain very busy solicitor who says I charge x and a certain barrister who says if you want to use me I charge x. You win your case the other side only have to pay the reasonable costs that a prudent person would pay. The client remains liable for the difference between what he agreed to pay and what is set in taxation.

They should also get the costs of taxation if suscesfull but not the costs account fees to the best of my knowledge.

McCrack

What's billed and whats recoverable are two different things and just because a party/party or solicitor/client Bill is reduced on Taxation doesn't equate to fraud.

The plaintiff solicitor in the Fr Reynolds defamation case learnt that the hard way when the Taxing Master reduced the instruction fee claimed from 250k to 80k. It wasn't that 250k was excessive (perhaps it was but not overly) it was that his file couldn't back up or justify the fee.

An important lesson to all practitioners.

johnnyskeleton

Carawaystick wrote: »

Digital Rights Ireland were involved in a case between ISPs and record labels

They got a bill for costs of (off the top of my head €23k
They appealed this and the bill was reduced to (guess) €13k
But the appeal cost them another ~€1900

My queries are
If lawyers say "our costs are x" and the taxing master decides they are considerably lower
Is this not a fraud of some kind,

As infosys says above it is not. It should also be pointed out that the taxation of costs is complicated by dozens of rules which can seem arbitrary such as:
1) explaining the progress of a case to an unusually anxious client is not recoverable;
2) pre-litigation opinions of counsel often aren't recoverable;
3) if a complex or urgent case generates less paperwork than a more straightforward, slow moving one, the one with more paperwork will often be assessed as having had more work done;
4) one of the high court taxing masters has decided that certain types of cases don't require senior counsel because sometimes they are run only by a junior counsel;

I could go on, but suffice it to say, not only is taxation meant to be, as infosys says, a payment of the reasonably incurred fees as opposed to the agreed fees or work actually done, but the rules are unclear so it is simply impossible to understand them.

Put another way, if the government published a list of legal fees per items of work and the reasonableness of their use in certain circumstances, then there would be much less disputes about the costs of cases (although there would be other problems with this, such as competition law).

like a mechanic billing an unwary motorist for spurious work

It's not at all like that because it is two highly informed parties engaging in a mandatory form of after the fact negotiation/arbitration on price. It would be more akin to a person being rushed to hospital, given full treatment, cured, sent a bill, then going into a state appointed accountant's office to argue that they didn't really need that MRI scan after all, and €150 for an x-ray should only cost, say, €100.

Secondly, would the costs of the appeal on costs not go with the appeal? Where the costs ended up much lower than the original claim? There seems to be an economic incentive to overcharge by the costs of a cost appeal, as it won't be worth appealing this amount...

I think there is a rule about that. Something like the party being taxed is entitled to the costs of the taxation unless the bill is reduced by more than 20% or 1/6th or something, in which case the party seeking taxation is entitled to their costs.

Carawaystick

Ok
So roughly A gets costs awarded against them in a case involving B

A pays its legal team what they agreed and B submits its legal costs

A think they are too high, gets them taxed. Taxing master sets B's costs to 60% (say) of what B submitted.

A pays these new lower fees to B's legal team.


Does B pay the rest of costs to its legal team (40%)?

Are they not paid at all?

Can A get it's agreed fees taxed? Logically not but logic often absent in these things...

Pro Hoc Vice

Carawaystick wrote: »

Ok
So roughly A gets costs awarded against them in a case involving B

A pays its legal team what they agreed and B submits its legal costs

A think they are too high, gets them taxed. Taxing master sets B's costs to 60% (say) of what B submitted.

A pays these new lower fees to B's legal team.


Does B pay the rest of costs to its legal team (40%)?

Are they not paid at all?

Can A get it's agreed fees taxed? Logically not but logic often absent in these things...

Yes B will owe what he agreed to pay his legal team, it is open to B to tax those costs remaining costs which will be done on the solicitor client basis, but of course it will be taken into account that B agreed to pay the figure.