Default costs certificate overturned over multiple service failures

A costs judge has refused to retrospectively validate service of a bill of costs that had been served by a claimant “upon the wrong person, by the wrong method, simultaneously serving by post to the wrong address”.

Master Leonard said that “all of these errors could have been avoided with a little diligence”.

In Gregor Fisken Ltd v Carl [2021] EWHC B9 (Costs), the defendant’s solicitors, Davis Woolfe, wrote to the successful claimant’s solicitors to confirm that they were no longer acting, that the defendant had instructed a direct access barrister and that any future correspondence should be sent to the defendant on a specified email address.

Davis Woolfe said that, as the main proceedings were no longer active, there was no need to file a notice of change of representation.

Two months later, MRN Solicitors, the claimant’s costs representatives, sent a notice of commencement and a bill of costs for £511,000 by email to the defendant at the address given by Davis Woolfe. It also sent hard copies to a property owned by the defendant, but which did not qualify as his address for service. Nothing was served upon Davis Woolfe.

There was no response from the defendant and the claimant obtained a default costs certificate. Before Master Leonard, the defendant sought to set this aside and the claimant asked him to remedy any error in respect of serving the bill and/or for an order pursuant to CPR 6.15(2) and CPR 6.27 that service be deemed good service.

Master Leonard upheld the defendant’s criticisms of the attempted service – first, the notice and bill should have been served on Davis Woolfe, not the defendant himself, as the firm was still on the record.

Second, attempting to serve the defendant personally by email breached the mandatory requirements of practice direction 6A as the defendant had never indicated that he was willing to accept service by email, and the claimant did not make the enquiries required by paragraph 4.2.

The third error was to post hard copies to an address which was not a valid address for service.

Master Leonard said: “In the circumstances, all that the claimant had to do to effect service of the notice of commencement was to send it and the appropriate supporting documents by DX or ordinary first class post to Davis Woolfe.

“Instead, the claimant attempted to serve upon the wrong person, by the wrong method, simultaneously serving by post to the wrong address. All of these errors could have been avoided with a little diligence.”

The proposition that Davis Woolfe, on the defendant’s behalf, authorised service upon the defendant by email “seems to me plainly to be wrong”. The email was copied to the defendant but did not purport to have been authorised by him. Even if it had been, the email did not mention service and, even if it had done that, “it could not have dispensed with the mandatory requirements of CPR 6.23 and CPR 42.2”.

Fortified by the recent ruling of Mr Justice Foxton in Serbian Orthodox Church, Master Leonard said he had already concluded “that it cannot be right to apply CPR 3.10 so as to validate service here.

“These defects in service are not minor or technical. Nor can they be said with certainty to have had no practical effect, given the possibility that service upon solicitors might have prompted a timelier response. Even solicitors who had declared themselves no longer to be acting might well have felt duty bound to offer the defendant some guidance on the consequences of ignoring a notice of commencement.”

There were, the judge continued, several reasons not to authorise service retrospectively under CPR 6.27. Though it was clear the documents came to the defendant’s attention, “it is common ground that in itself it is not sufficient”.

For one thing, the claimant had not taken reasonable steps to effect service in accordance with the rules. “Solicitors are officers of the court. They are expected to understand and to comply with the Civil Procedure Rules. Mr Shepherd makes a good point when he says that an order under CPR 6.27, retrospectively authorising service on the facts of this case, would offer an indication that even for a solicitor, compliance with the rules is optional.”

Further, there was clearly prejudice to the defendant here. Given the size of the bill, “there is good reason to suppose that applying CPR 36.27 so as to ensure that the claimant escapes the consequences of its procedural failures, but the defendant does not escape the consequences of his, would result in a significant windfall to the claimant”.

Master Leonard concluded that the application under CPR 6.27 must be refused and the default costs certificate set aside.

The judge added that he was “surprised to be told that MRN was given to understand by someone at the SCCO that a consent order would be needed to set aside the default costs certificate”.

He said: “I have referred above to practice direction 47, paragraph 11.1, which provides that a court officer, meaning a member of court staff, may set aside a default costs certificate at the request of the receiving party.

“In my view, the default costs certificate should have been set aside when the SCCO received MRN’s letter.”

Stephen Innes (instructed by Rosenblatt) for the claimant. Philip Shepherd QC (instructed by Charles Russell Speechlys) for the defendant.

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Costs News
Published date
27 Jan 2022

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