Solicitor LLP….Do I File and Serve a Budget?

The rules are quite clear in respect of recovering costs as a litigant in person. CPR 46.5(2) says: ‘The costs allowed under this rule will not exceed, except in the case of a disbursement, two-thirds of the amount which would have been allowed if the litigant in person had been represented by a legal representative’.

The Practice Directions on CPR 46.5 at 3.4 say that the hourly rate is limited to £19 an hour.

This is the case for a litigant in person who is not a solicitor, but not a qualified solicitor representing himself in litigation, but what about a firm of solicitors operating through the medium of a Limited Liability Partnership?

Recently, in Halborg v EMW Law LLP [2017] EWCA Civ 793 (23 June 2017), the Court of Appeal upheld a decision that a firm of solicitors that is a party to litigation is not to be treated as a litigant in person when recovering costs.

Sir Terence Etherton, master of the rolls, said the firm of solicitors; EMW Law LLP was not a litigant in person and could recover solicitor costs as opposed to litigant in person costs.

Sir Terence Etherton made it clear that the law established in London Scottish Benefit Society v Chorley, Crawford & Chester (1884) 13 QBD 872 still applied. A practising solicitor who represented himself in litigation was entitled to recover costs for his own time as if he/she had employed a solicitor. It was the view of the Court that there was no reason why the principle established in London Scottish Benefit Society v Chorley, should be valid for a traditional partnership but invalid for an LLP.

Not only does this cement the Chorley principle, but this also brings to light the question of cost budgets. If it is the case that a solicitor acting as litigant in person can recover standard solicitor rates, is a cost budget required?

The rules are clear-cut in so far as a litigant in person requiring to file a budget, the rules at CPR 3.13 (1) say ‘Unless the court otherwise orders, all parties except litigants in person must file and exchange budgets’ However, if a solicitor acing as a litigant in person is not considered a litigant in person vis a vis the level of costs he can recover, presumably it would ensue that he/she should not be considered a litigant in person in so far as the filing and service of cost budgets.

Fortunately, there is some case law that can assist; Campbell -v- Campbell [2016] EWHC 2237 (Ch). In Campbell v Campbell, Chief Master Marsh said the following: In an ordinary case, in which a litigant in person conducts the case with limited assistance, there may be little need for the court to exercise control over the costs which are recoverable by the making a costs management order. The litigant in person hourly rate is currently set at £19 per hour and the amount of costs should rarely be disproportionate to what is at stake. Where, however, the claim is complex and counsel is instructed on a Direct Access basis, the litigant in person’s recoverable costs may be substantial when disbursements and the cost of legal services are taken into account’

In view of the same, it is quite clear the rules absolve a litigant in person from preparing a budget as it is likely that the costs will be kept proportionate. However where a litigant in person is a solicitor and the rates will be at a significantly greater level, we would advise calling your cost draftsman to prepare a budget!