Home Information Cases Jemma Trust Co Ltd v Peter D’Arcy Liptrott, John Forrester, Kippax Beaumont Lewis (2003)

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Jemma Trust Co Ltd v Peter D’Arcy Liptrott, John Forrester, Kippax Beaumont Lewis (2003)

Summary

It was appropriate for solicitors to make a separate charge based on value for the administration of an estate, in addition to fees for time spent, provided that the remuneration overall remained fair and reasonable.

Facts

Appeal by solicitors ('KBL') against the decision of Costs Judge Rogers on a preliminary issue that KBL were not entitled to charge a percentage of the value of the estate at the same time as charging for the time spent on the administration. KBL were instructed by executors to undertake the administration of a deceased's estate. There was no express agreement as to the basis on which KBL would charge the estate for its work. KBL charged fees based on the time actually spent by its fee earners and also made charges based on the value of the estate. In the detailed assessment of the costs charged, KBL claimed to be entitled to charge 1.5 per cent of the value of the estate in addition to the time spent and 0.75 per cent of the value of the deceased's residence. The costs judge held that it was anachronistic and wrong, despite the authorities permitting it, for solicitors to charge a percentage of the value of the estate and that solicitors should charge either on the basis of value or of an hourly rate but not both.

Held

(1) The costs judge was wrong to find that it was no longer appropriate for solicitors to make a separate charge based on value for the administration of an estate. It was still open to make such charges provided that the remuneration overall remained fair and reasonable, as required by the Solicitors' (Non-Contentious Business) Remuneration Order 1994 SI 1994/2616. (2) The authorities did not merely permit solicitors to charge by reference to a percentage of value, they indicated that, in relation to non-contentious business, charging by reference solely to an hourly rate was to be resisted. (3) It was not decisive that, in assessing costs in contentious business, it had become usual to incorporate the value element of any money or property into the hourly rate. (4) It would usually be right to reduce the value element percentage by reference to a regressive scale. The applicable bands in cases such as the present should be: 1.5 per cent for up to £750,000; 0.5 per cent for £750,000 to £3 million; one-sixth of a percent for £3 million to £6 million; one-twelfth of a percent for over £6 million. (5) The costs judge assessed too low an hourly rate because it did not appear to include a value element. The uplift over the expense rate was too low. He therefore failed to take account of the amount or value of the money or property involved as required by the Order. The case had to be remitted to the costs judge for reassessment.

Appeal allowed.

Court of Appeal
Gibson LJ, Mance LJ, Longmore LJ, Costs Judge Wright
Judgment date
24 October 2003
References

​LTL 24/10/2003 : (2004) 1 WLR 646 : (2004) 1 All ER 510 : Times, October 30,

2003 : Independent, October 28, 2003