ISG Retail Ltd v FK Construction Ltd [2024] Costs LR 489
The matter related to a construction dispute. The Claimant engaged the Defendant for roofing and cladding works on a project in Bristol. The Defendant issued an application for payment for £1,691,679.94 which the Claimant did not pay. Instead, the Claimant instigated a Pay Less Notice, leading to an adjudication. The adjudicator decided in favour of the Defendant, ordering the Claimant to pay the full amount plus interest.
Following the adjudication, the Defendant sought its costs of the part 8 proceedings. Both parties were content with a summary assessment. The Defendant lodged a total bill for £213,142.65 of which £78,869.25 was solicitors’ costs and £133,908.00 was the cost of leading and junior counsel.
The Claimant’s total bill up to and including the hearing was £115,001.70 of which £50,950.00 were solicitors’ costs and £62,233.00 was the cost of leading and junior counsel (of which £53,000 was for the hearing).
The Defendant was willing accept £149,199.86 equating to 70% of its total costs.
Prior to his findings, Moody J confirmed that whilst costs assessment was not a comparative exercise, he then went on to compare the Defendant’s costs with the Claimant’s schedule amounting to just over 50% of the Defendant’s schedule.
Moody J then went on to say that although ‘litigation in this field engages lawyers with a high degree of specialist and technical expertise and that is reflected in the fees charged,’ nonetheless, he found the Defendant’s counsel’s fees to be very high almost double the Claimant’s counsel’s fees despite both Leading Counsel of comparable seniority.
Moody J also took issue with the number of fee earners working on this matter.
Moody J took the view that overall the costs were too high and disproportionate. He reduced the solicitors’ time to £53,000.00 and as for counsel’s fees, £80,000.00 was allowed equating to a total of £133,000.00.
Commentary – Another reminder that despite the level of value and complexity, parties need to expend their time and incur fees proportionately. Also worth bearing in mind that despite the Court’s condemnation of ‘comparisons exercises’ in theory, in practice, such exercises are commonly adopted.