The Supreme Court Costs Office

No.20 of 2004

Pearce v Ove Arup Partnership Ltd & Ors
29 June 2004
Mr Justice Peter Smith (Sitting with Assessors)

The claimant obtained a legal aid certificate issued on 13 March 1995 to bring proceedings for breach of contract and other causes of action within the same proceedings against identified defendants.

Pursuant to that certificate his then solicitors issued a writ against the four named defendants on 22 March 1996. That writ was marked not for service out of the jurisdiction. Utilising the same certificate a second set of proceedings was issued on 30 September 1996.

Action number 1 lapsed, because it had not been served out of the jurisdiction, but action number 2 went to trial, despite various attempts by the defendants to stop it. When writ number 2 was served notice of issue of legal aid certificate was served with it, but this was not the case in the case of the first writ.

The defendants tried very hard to stifle the second action, applying successfully to strike it out, but that success was reversed on appeal to the Court of Appeal, and the case went to trial at the beginning of 2002, when it was ultimately dismissed. The claimant was ordered to pay the costs of the second, third and fourth defendants, such costs to be determined by the Costs Judge. The Judge also ordered that the claimant’s costs payable by the CLS Fund should be determined by the Costs Judge. An application on behalf of the defendants for a wasted costs order against the claimant and his legal advisers was dismissed with costs.

The claimant’s liability for costs payable to the defendants were assessed at nil on 14 May 2002 after a disputed hearing, and at the same time an order was made for payment of the second and third defendant’s costs out of the CLS Fund. Directions were given for the assessment of the claimant’s costs, which led to the hearing the subject matter of the appeal.

The claimant’s total bill claimed against the Fund was £278,005.14, and payments on account have been made to various solicitors involved in the case successfully. One firm received over £80,000 on account, and the result of the Costs Judges decision meant that they would have to repay that sum to the LSC, with dire financial consequences for all the partners.

The Costs Judge felt that the facts of the case were indistinguishable from the case of Bridgewater v Griffiths [2000] 1 WLR 524, and felt constrained therefore to assess the costs payable to the claimant’s various solicitors against the LSC at nil. The claimant appealed.

In a lengthy and detailed judgment the Judge analysed with care all the arguments which have been addressed to Mr Justice Burton in the Bridgewater v Griffiths case, and rejected all counsel’s attempts to distinguish this case from that case on the facts.

However, he differed from Mr Justice Burton by concluding that Regulation 46(3) of the Civil Legal Aid (General) Regulations 1989, which reads:

"(3) A certificate shall not relate to more than one action, cause or matter -"

should be given a purposive interpretation, so that after the words quoted above the words "in existence at any given time" should be deemed to be implied into it.

In those circumstances the Judge allowed the appeal, and remitted the matter to the Costs Judge to assess the costs against the Fund in the usual way.