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Upon which principles can costs of a third party advisor be claimed as part of own solicitor costs?

Citation: NAP Anglia Limited v Sun-Land Development Co. Limited [2012] EWHC 519 (TCC)

Keywords: Adjudication, Costs, Construction contracts, Costs assessments, Enforcement

The Facts

NAP applied for an assessment of costs. In a judgment dated 3 November 2011, NAP was awarded summary judgment for the amount awarded by the adjudicator, but the application for the adjudicator’s fees and expenses in the sum of £9,855.00 was refused. The adjudicator had directed that the fees were to be paid by Sun-Land only when they had been paid to the adjudicator by NAP. Claims consultants had been instructed during the adjudication and solicitors in this application by NAP. 

Concurrent proceedings exist in Norwich County Court. Judgment in excess of £65,000 was stayed, therefore NAP recovered 60% of the sum claimed. Sun-Land served two bundles of assorted and unpaginated documents with a witness statement that proved useless at the hearing and wasted time.

NAP sought indemnity costs, but Sun-Land contended that a more appropriate sanction for serving documents in this manner is to allow a greater sum than might ordinarily be considered.

Held (Edwards-Stuart J)

Indemnity costs were not awarded. NAP was to be awarded a proportion of its costs to reflect the degree of success and the time spent on the issues which it lost. The appropriate proportion of NAP’s costs that should be paid by Sun-Land is 85%.  Some of the costs claimed are in respect of the costs consultants, who provided assistance to the solicitor in this application.  It is now established that a party to arbitration can be represented by claims consultants and that the costs incurred, if awarded to that party, can be assessed by either the arbitrator or by the court. (Piper Double Glazing v DC Contracts [1994] 1 All ER 177) Further approval was provided by the Court of Appeal in R (Factortame) v Secretary of State for Transport [2003] BLR 1. It was thus determined that in relation to third party costs that:

  1. Sums paid to a third party incurred solely for the purpose of advancing or assisting with the prosecution or defence of a claim may in principle be recoverable as costs provided that the third party is not doing any acts that only a solicitor can do and/or does not do any act whilst purporting to act as a solicitor;
  2. It does not matter that the work done by the third party, even if it employs non-practising barristers or solicitors to do it, is work of a type commonly done be solicitors;
  3. The costs of a third party engaged in these circumstances may be assessed by the court. To be recovered, they must have been reasonably incurred and be reasonable in amount.