THE HIGH COURT [2012] IELCA 6 2005 1 MCA IN THE MATTER OF THE COURTS OF JUSTICE ACTS 1924-2003 AND IN THE MATTER OF AN APPLICATION PURSUANT TO SECTION 12 OF THE PERSONAL INJURIES ASSESSMENT BOARD ACT 2003 AND IN THE MATTER OF AN INDUSTRIAL ACCIDENT WHICH OCCURRED ON 14 JUNE 2004 AT BOGHALL ROAD, BRAY IN THE COUNTY OF WICKLOW BETWEEN BRIAN EGAN PLAINTIFF AND A.O. SMITH ELECTRIC MOTORS (IRELAND) LIMITED DEFENDANT RULING ON INSTRUCTIONS FEE AND BRIEF FEE. By Order dated 22 June 2005 the court noted that a settlement had been reached between the parties and that terms of consent had been reduced to writing and executed. It was ordered that the consent be received and filed and that all further proceedings (save such as may be necessary for the purpose of enforcing the agreement) be stayed upon the terms thereof. The said consent provided, inter alia, an undertaking by A.O. Smith Electric Motors (Ireland) Limited to permit the Applicant’s engineer to inspect a certain coil insertion machine, the subject matter of intended proceedings, on or before 30 June 2005. The machine had allegedly been the cause of a severe hand injury to the Plaintiff. The consent also provided for the discharge of the engineer’s fees by the Respondent, in the circumstances outlined. The agreement specifically provided that the issue of costs was to be adjourned with liberty to re-enter. The matter was re-entered before the court pursuant to the notice of motion dated 25 February 2008 and as a result a further Order was made on 31 March 2008, on consent of the parties, whereby the Applicant would be entitled to recover against the Respondent the costs of the original motion under Section 12 of the Personal Injuries Assessment Board Act 2003 up to and including 22 June 2005. A bill of costs was duly prepared on behalf of the Applicant and which bill purported to charge the appropriate fees pursuant to the agreement reached between the parties and noted in the said Order of 31 March 2008. The relevant summons to tax having been issued and served, the matter duly came before me for taxation on 6 February 2012. The bill was part taxed on that date and adjourned by me to enable me consider the solicitor’s file and papers, with a view to adjudicating on the instructions fee which is claimed at Item 168 in the bill in the sum of €30,000.00 and counsel’s brief fee which is claimed at Item 64 in the sum of €12,500.00 plus VAT. A further fee amounting to €2,500.00 plus VAT is claimed at Item 102 of the bill in respect of counsel’s fee for drafting submissions. It is common case that concurrently with this application a similar application was being pursued by the same solicitor in a matter entitled ‘ANATOLI CIUMACENCO V A.O. SMITH ELECTRIC MOTORS (IRELAND) LIMITED’ and in that case an Order dated 3 April 2008 grants outlays only to the Applicant (including counsel’s fees). By notice of motion dated 7 January 2005 the Applicant sought the following relief: 1) An Order pursuant to Section 12(3) of the Personal Injuries Assessment Board Act , 2003, requiring the Respondent to preserve a horizontal coil insertion machine, which machine, for the avoidance of doubt, is a machine used to insert copper coils into an iron motor which the Applicant was operating on 14 June 2004 at the Respondent’s premises at Boghall Road, Bray in the County of Wicklow, in its present condition pending the resolution of the Applicant’s claim against the Respondent herein. 2) An Order pursuant to Section 12(3) of the Personal Injuries Assessment Board Act, 2003, requiring the Respondent to preserve all documents, records and other relevant papers whatsoever in its possession or power of procurement pending the resolution of the Applicant’s claim against the Respondent herein relating to: a) the maintenance of the said insertion machine which the Respondent was operating at its premises at Boghall Road, Bray in the County of Wicklow on 14 June 2004, and: b) complaints made about the condition and/or reliability and/or suitability and/or safety of the said machine for a period of three years prior to the occurrence of the said accident. The notice of motion was grounded on the affidavit of Brian Egan, the Applicant, herein and all documents including the exhibits in said affidavit were duly served on the Respondent’s solicitor. A replying affidavit on behalf of the Respondent was received by the Applicant’s solicitor on or about 11 February 2005 and the motion first appeared in the list of the Master of the High Court on 11 February 2005 when it was adjourned and came on for hearing again on 6 April 2005 when it was transferred to the High Court list for adjudication. Thereafter the matter was in the list on 25 April 2005 and adjourned again, following which an affidavit sworn by the Applicant’s solicitor, exhibiting a letter which he had written to the Respondent, was filed. It appears that written legal submissions on behalf of the Applicant were prepared by counsel in or about June 2005 and the matter came on for hearing on 22 June 2005 when the settlement already referred to was announced to the court. In opening the bill to me Mr. Garrett Rice, Legal Costs Accountant, on behalf of the Applicant stated that there was a huge amount of uncertainty as to the law and that this was one of the first applications to be made pursuant to the provisions of Section 12 of the PIAB Act 2003. He stated that there was urgency involved as it transpired that the company was intending to relocate to Asia and there was a concern that the machine in question had already been altered. There were two main priorities as follows:1) the preservation of the machine; and 2) the preservation of documents relating to the maintenance and general instructions concerning the machine. He stated that the application is injunctive in nature and referred to the matter being before the court on five occasions. He noted that the final Order was made on the consent of the parties and incorporated the agreed terms entered into between them. He stated that instructions fees in similar applications were being taxed in the years 2009 and 2010 at figures ranging between €4,500.00 and €5,000.00. Mr. Rice submitted that the fee which is charged at €30,000.00 includes not only a valuation in relation to the work carried out but also provision for the novelty of the application. I enquired of Mr. Rice if he could differentiate between the work element and the novelty aspect but he was unable to do so. Mr. Rice referred me to four comparators, particulars of which were provided to me as follows:(1) Louise McCarthy v Dunnes Stores – Section 12 Application: Instructions fee claimed €6,450.00 and allowed at €4,750.00. Brief fee claimed at €1,000.00 and allowed at €500.00. (2) Lisa Keegan v Fountain Beverages Ltd. – Section 12 Application: Instructions fee claimed at €5,750.00 and allowed at €3,000.00. Brief fee claimed at €3,500.00 and allowed at €650.00. (3) Toland v Sharkey & Anor. – Interlocutory Injunction: Instructions fee claimed at €27,500.00 and allowed at €22,500.00. Brief fee claimed at €12,500.00 and allowed at €8,500.00. (4) Wicklow County Council v John O’Reilly & Others: Motion to strike out proceedings against 3 Defendants: Instructions fee claimed at €12,500.00 and allowed at €10,500.00. Brief fee claimed at €3,000.00 and allowed at €3,000.00. In reply Mr. David Dunning, legal costs accountant, on behalf of the Respondent, whilst accepting that the matter had an element of novelty to it at the time of the initial application, was of the opinion that the work involved was limited. He stated that the uncertainty with regard to how the court should deal with such applications had arisen by reason of the fact that the officials in the Central Office of the High Court were somewhat uncertain as to whether the matter should go before the Master of the High Court or directly to the court. In the event the matter had gone initially to the Master of the High Court and the Respondent actually had no difficulty with the Master assuming jurisdiction. He accepts that a replying affidavit was filed and that the matter was before the Master’s court on two days prior to it being adjourned to the Judge’s list. Mr. Dunning further pointed out that in fact two motions were before the court at all times and that an attempt was being made in the instant case to cover the solicitor’s professional fees in both cases. In his view the appropriate comparators indicated that the appropriate professional fees in or about 2009 and 2010 ranged from between €3,500.00 and €2,500.00. In his view the fees were being constantly driven down by the Taxing Master having regard to the actual nature of the work involved in such cases. He accepted however that such other cases did not have the element of the attendances before the Master of the High Court or indeed written legal submissions by counsel. He posed the question however as to what work was actually carried out by the Plaintiff’s solicitor in this case which would justify the fee being claimed. Mr. Dunning provided two comparators as follows1 :(1) Mary Fortune v Iarnrod Eireann / Irish Rail – Section 12 Application: Instructions Fee claimed at €5,750.00 and allowed at €2,250.00. (2) Keegan v Fountain Beverages Ltd – Section 12 Application: Instructions Fee claimed at €5,750.00 and allowed at €3,000.00. Brief fee claimed at €3,500.00 and allowed at €650.00. Mr. Dunning suggested that the starting point for assessing the instructions fee should be at the sum of €2,250.00 in accordance with the Fortune case referred to at (1) above. He suggested that two further elements must be taken into account as follows: 1. the fact that the matter was before the Master of the High Court on two separate days and that written submissions had been directed on the first such day: 2. the work of preparation for the hearing in the High Court which would include the work relevant to the grounding affidavit, consideration of replying affidavit, the filing of a supplemental affidavit and the issue in relation to the jurisdiction of the court. Accordingly, it was suggested that sums in the order of €2,500.00 each should be added which would also take into account the novelty aspect. Mr. Dunning suggested that the overall instructions fee should not be more than €7,500.00. In reference to counsel’s brief fee Mr. Dunning advised that the Respondent’s counsel had marked one brief fee to cover the two 1 All comparators are annexed hereto. applications before the court, at the sum of €1,050.00. He accepted that this was a light fee however. Further, he suggested that the preparation of written legal submissions was in ease of the barrister concerned and must be taken into account in assessing the overall brief fee. With that in mind he suggested that a brief fee of €5,000.00 might be reasonable together with a figure in the order of €1,200.00 / €1,500.00 for the submissions. In response and dealing with the brief fee Mr. Rice accepted that in relation to the second application (Ciumacenco) the brief fee marked at €12,500.00 (which is identical to the fee marked in this case) is too high but he felt that the assessment of counsel’s brief fee in the instant case at €5,000.00 was too light. In relation to the instructions fee Mr. Rice submitted that the overall fee for preparation for the case should be put at €10,000.00. There then should be an allowance for a further four days at €1,500.00 per day with a further allowance, which was unspecified by him, in respect of novelty and responsibility. Mr. Rice submitted that he should leave it to the Taxing Master to assess these latter aspects. Finally, one further observation was made by Mr. Dunning in relation to the instructions fee, namely in that it appeared that Mr. Rice was seeking an allowance in respect of the novelty aspect on the double, in that the sum of €10,000.00 for preparation for the hearings would clearly take that into account. He suggested that the brief fee in relation to the Ciumacenco case should be in the range of €500.00 / €1,000.00 maximum. Given the divergence of views between the parties and the fact that a novelty element was being claimed as constituting an appropriate aspect to be taken into account by me I reserved my ruling and requested that the solicitor’s full file be made available to me for consideration. I confirm that I have now carefully considered the solicitor’s file and the papers. It appears that the Applicant’s solicitor initially received instructions to act on 15 July 2004 when the client explained the background to the matter to him. It seems that a draft Section 68 letter was prepared in or around that time and on 23 July 2004 a draft letter was prepared by the solicitor for submission to the Respondent company by way of requesting it to preserve the machine and this together with instructions were furnished to counsel on 28 July 2004. At that stage the solicitor’s instructions were that there was some likelihood of the machine being tampered with and hence the necessity to proceed. The draft notice of motion and grounding affidavit were received from counsel on 3 August 2004, counsel having being requested to prepare same as a matter of urgency. A fresh draft letter (presumably as settled by counsel) was prepared and was actually signed by the client and sent to the Respondent company. No response had been received from the Applicant’s employer by 3 September 2004. The solicitor issued his Section 68 letter on 6 September 2004 and it was signed by the client. The PIAB application was prepared in draft form at this stage and the file contains a note dated 24 October 2004 to the effect that the motion was to be issued at the same time as the motion in the Ciumacenco case, as the reliefs being claimed were the same in each case. The solicitor discussed the matter with counsel on 1 November 2004 with particular reference to the draft affidavit grounding the application. The solicitor was concerned that the Respondent might already have carried out alterations to the machine and requested counsel to consider whether the application was warranted at all. It seems that some partial discovery of documents had already been obtained (presumably from the Plaintiff) in relation to the machine in question. The solicitor attended on the client on 3 November 2004 when the circumstances surrounding the accident were discussed in some detail together with matters relating to when the client discovered that the machine had been altered. The client instructed that the machine had been altered some three weeks after the accident and that his employer Mr. Mark Redmond had told him so, after receipt of the letter requesting preservation of the machine. No undertaking in relation to preservation of documents had been received. The solicitor wrote a further letter to the Respondent company on 10 November 2004 requesting the further undertakings as they are set out. There was a further attendance on the client on 21 December 2004 when the grounding affidavit was discussed, approved by the client and duly sworn. The notice of motion was duly issued in January 2005 and served directly on the Respondent ‘s insurance broker. A replying affidavit of Mark Redmond on behalf of the Respondent was received on 11 February 2005 and in which Mr. Redmond referred to the Respondent’s difficulties in preserving the machine given that it was in daily use and frequently repaired. It is clear that the matter appeared in the Master’s court on 11 February 2005. However, the file contains no attendance note in respect of such appearance and I have ascertained some limited information in this regard by reference to the solicitor’s attendance note on the client dated 24 February 2005 from which it is clear that in addition to discussing other matters relating to the action, the solicitor reported to the client that the matter had been in the Master’s court and that in fact it was again listed for the following day. The client advised that there were rumours of the company moving its business to Eastern Europe. It appears that the matter did not come before the Master of the High Court on the following day as the solicitor wrote to his client on 25 February 2005 dealing with medical matters but also advising of the adjournment on 11 February and that ultimately the matter would “come before the High Court itself”. The Master of the High Court on 6 April 2005 duly sent the matter forward to the Judge’s list. There is no attendance note on file in relation to this aspect. The Applicant’s solicitor wrote a letter to the Respondent’s solicitor on 19 April again requesting undertakings in regard to preservation of the machine and documents. This arose out of media reports of a possible relocation of the Respondent’s business to Asia. The said letter was exhibited in the affidavit of the Applicant’s solicitor which was sworn on 25 April 2005. A formal application to PIAB was issued on 29 April 2005 and on the same date an up to date brief was sent to counsel on the basis that the matter was in the Judge’s list for 9 May 2005. It appears that there was an attendance in court on 9 May but no attendance note appears on the file. The solicitor again attended on his client on 10 May 2005. The client reported that the company was closing and the business would be shut down by June. It is noted on the file that the motion was apparently erroneously put in to the list to fix dates. The matter was again before the court on 13 June 2005. Again no attendance note appears on the solicitor’s file. Apparently the motion was adjourned for mention to 20 June on the basis of the Respondent’s counsel seeking instructions in relation to the discharge of engineer’s fees in respect of inspection facilities. The solicitor attended on Mr. Barry Tennyson, Consulting Engineer, as to the likely cost of inspection which was put at €700.00. Draft letters in relation to this and in relation to the Ciumacenco case were sent to counsel for approval and on 17 June a letter was sent to the Respondent’s solicitor as to the proposed inspection facilities and the payment for same by the Respondent. It appears that the matter was again in the court list on 22 June 2005 and yet again no solicitor’s attendance note appears on file. The Applicant’s solicitor’s letter to the Respondent’s solicitors dated 27 June 2005 outlines the terms of settlement which were reached on or before 22 June 2005. The remainder of the solicitor’s file (which I have read) is largely irrelevant. However, in relation to the costs of this application there is a note on file dated 22 November 2010 which records a discussion between the Applicant’s solicitor and counsel in which the solicitor expresses the view that the fees marked by counsel are “completely untenable”. Discussions took place between the parties’ respective solicitors and the file contains reference to a revised fee note which was sent to the Respondent’s solicitors on 2 December 2010, followed by an amended version thereof, sent by letter of 6 December 2010. This revised fee note which was sent by open letter, identifies the solicitor’s overall professional fee in this case at the sum of €3,750.00 together with VAT. Counsel’s fee is put at €2,000.00 including VAT. RULING. By way of preliminary observation I should say that the bill of costs which has been presented for taxation clearly includes reference to work which is not in any way related to the Section 12 application. I refer to the following items thereof: Items 4, 5, 6 Item 11 (Companies office searches); (arrangements for medical examinations of applicant); Items 16, 17 (PIAB application); Items 18, 21 (medical appointments); Items 23, 25, 26, 28, 29, 35 (medical). The bill of costs appears to have been prepared and the preamble to the instructions fee refers not only to the work which arose in relation to the application pursuant to Section 12 of the PIAB Act 2003 but also includes necessary work in relation to the general investigation of the circumstances surrounding the accident, the extent of the injuries sustained by the prospective Plaintiff, arranging of medical examinations, considering reports and the like. There is also the inclusion of the application to PIAB itself. None of these costs should have been included in the bill and cannot be taken into account by me. The second point of relevance to the assessment of both instructions fee and brief fee is that this application was prosecuted in conjunction with a similar application in the Ciumacenco case. Whilst no order as to costs has been made in relation to Ciumacenco, the order in that case makes it clear that the fees of counsel are to be assessed. This does not mean, however, in my view, that a full instructions fee is to be allowed on a party and party basis in the instant case. Costs on a party and party basis are allowable on the premise that there is in existence a legal liability upon the party claiming such costs, to pay at least the amount claimed, to his or her own solicitor, on the solicitor and own client basis. Further, it is well established that the onus is on the claiming party to demonstrate that costs incurred are proper and reasonable in all the circumstances. In the instant case, it is in my view, necessary to take into account that the solicitor was, in effect, prosecuting two similar applications at the same time and accordingly, notwithstanding the fact that no party and party costs referrable to the Ciumacenco case are allowable, it is to be reasonably assumed that Mr. Ciumacenco bears a liability towards his instructing solicitor in relation to the fees incurred by him. As it is clear that the issues in relation to Section 12 of the PIAB Act in both cases were identical, and considered to be so by the solicitor concerned, neither Applicant could or should have been expected to defray the solicitor’s entire fees in the matter. The proper course would be for the solicitor to assess the appropriate overall fee for prosecuting the issue and divide same between the two clients. Accordingly, I must assess the instructions fee in accordance with the appropriate statutory criteria and the case law and having arrived at the proper full fee to be allowed on a party and party basis I must, in my view, reduce the allowance by 50% to reflect the Ciumacenco involvement. It seems to me that if I were not to do so I would be making an allowance based on an incorrect premise namely that the Applicant in this case is liable to his solicitor in respect of the full fees applicable. This would, in my view, amount to either the provision of a subsidy to Mr. Ciumacenco in respect of fees incurred by him, or the allowance of an unintended windfall to the solicitor. In relation to the brief fees, the position is perhaps more obvious in that the court has allowed counsel’s fees, on a party and party basis, in both cases. However, the situation which arises is similar to that in Ormonde v Ireland [1988] ILRM 490 in the course of which Barron J. observed “repetitive acts do not warrant the same remuneration as the first of such acts”. That case arose in the context of consideration of instructions fees and brief fees relevant to a series of motions for judgement in default of defence all of which were issued against the same Defendant although on behalf of different Plaintiffs and the same solicitor and counsel being involved in each case. All were heard and disposed of on the same date. In the instant case, in my view, it is appropriate to assess the brief fee, as between party and party, firstly on a stand alone basis and then to divide the fee equally between the two bills of costs. While counsel may have received two briefs the issue could only be argued once. THE INSTRUCTIONS FEE. I have considered the nature and extent of the work and have described its principal aspects from the information appearing on the solicitor’s file, and on the affidavits and exhibits thereto. I must take into account the taking of initial instructions by the solicitor, the drafting of the letter intended to be sent to the Respondent requesting preservation of the machine in question and the discussions with counsel in that regard. It appears to be common case that there was some element of novelty to the application. I do not believe that this is an important factor in the assessment of the costs herein. The novelty, if relevant, attaches only to the question as to whether the Master of the High Court or the High Court proper should hear such applications. The entitlement to the relief in question is abundantly clear from the wording of Section 12 of the Act itself. Whilst it appears that in practice, the High Court now deals with these matters on the basis that the reliefs obtainable under Section 12 are injunctive in nature, the issue does not appear to have been settled in the instant case. Having provided him with the relevant instructions, it is clear that counsel drafted the notice of motion and affidavit grounding the application and at the same time drafted a similar application in Ciumacenco. The matter was in the Master’s court on two occasions namely 11 February and 6 April 2005. No attendance notes are available in regard to the arguments, if any, which took place before the Master. It is apparent from the file that the Applicant’s solicitor went to the Master’s court on 6 April 2005 in the full expectation that the matter would be sent to the Judge’s list. This seems evident from both the attendance on the client on 24 February and the solicitor’s letter to him on 25 February 2005. A replying affidavit was filed and served on behalf of the Respondent and it is clear that the Applicant’s solicitor became concerned about the impending departure of the Respondent’s business from this jurisdiction and accordingly the further letter which he sent to the Respondent’s solicitor was exhibited in a supplemental affidavit. No attendance notes whatever are available in regard to the remaining dates on which the matter was before the High Court namely 9 April, 13 June and 22 June 2005. However, we do know that counsel prepared and presumably the solicitor lodged written legal submissions in court. There is no information on the solicitor’s file as to why this course was taken. In fact the file makes no mention whatever of such submissions. There is however, reference on the file to discussions between the parties’ respective solicitors either on or after 13 June 2005 which indicated that an accommodation was emerging between the parties which would involve the retention of an engineer to carry out an inspection of the machine with the costs thereof to be defrayed by the Respondent. The work in relation to the actual retention of the engineer is referrable to the prosecution of the action itself and not to the motion. It is clear from the file that the arrangements entered into were also applicable to the Ciumacenco case. I cannot find any basis whatever for the instructions fee of €30,000.00 claimed herein. Indeed I think I can usefully borrow the solicitor’s description in relation to counsel’s brief fee and state that this instructions fee is also “completely untenable”. Having considered the file, I have difficulty with the respective assessments proffered by the legal costs accountants herein and whilst respecting their views, I am of opinion that both have fallen into error in assessing the value of the work in its nature, extent and also in regard to the extent of the party and party indemnity applicable herein. I do not believe that the comparators put forward on behalf of the respective parties are of great assistance to me. Two of the comparators relied upon by the Applicant, namely the full injunction application and the dismissal application, simply fail to compare like with like. The remainder of the comparators do relate to the costs arising in Section 12 Applications. I would assess the appropriate instructions fee as follows: a) Work of and incidental to taking instructions, preparation of draft initial letter, instructing counsel and subsequent discussions with him preparatory to issuing letters as amended: € 600.00 b) Considering draft notice of motion and affidavit received from counsel, discussing with client, explaining the position and issuing motion: € 500.00 c) Considering replying affidavit, further attendance on client, writing letter to Respondent’s solicitor, supplemental affidavit and exhibit; briefing counsel: €1,000.00 d) Attending Master’s court (twice): e) Attending High Court (twice): € 500.00 € 750.00 ________ €3,350.00 I then have to consider whether an additional sum is allowable to cover novelty and responsibility, if these factors properly arise for consideration in the case. I think I must be influenced by the fact that Mr. Dunning has accepted the existence of a novelty aspect. I believe the responsibility aspect is no different than would arise in any such application and is taken into account in the fees mentioned above. I have difficulty in identifying any aspect of the solicitor’s work which was impacted upon by the novelty issue but nonetheless, I am prepared to make an allowance either in that regard or by way of marginally increasing the fees allowed by me under the headings referred to above and accordingly I add an additional €500.00, bringing the total to €3,850.00. Finally, the overall allowance must be reduced by 50% in order to reflect the Ciumacenco element. The allowance therefore is €1,925.00 If the Ciumacenco element is disregarded, the fee measured by me , although slightly higher, is not appreciably different to that actually measured by the Applicant’s own solicitor in the amended bill which was proffered to the Respondent’s solicitor with his letter of 2 December 2010. THE BRIEF FEE AND SUBMISSIONS FEE. I am not entirely happy that a separate fee in relation to the preparation of outline legal submissions is allowable in this case, I think the fairest way to deal with the matter is by assessing the brief fee on the basis of the issue which arose for determination against the background of the legal research which counsel obviously undertook in his preparations for the hearing. I am cognisant of the fact that the Applicant’s solicitor in the amended fee note which was issued to the Respondent, claimed counsel’s fee at €2,000.00 inclusive of VAT. This was done with the concurrence of counsel. In effect counsel’s professional fee amounted to €1,652.90. This sum was also intended to cover counsel’s fees on settlement of the notice of motion and affidavit. Am I at large to disregard the solicitor’s assessment of counsel’s fees which was sent in an amended bill by way of open letter to the Respondent’s solicitor? As with the instructions fee I will assess the fee (inclusive of submissions) on the basis of the work outlined to me. The legal research represents a large element of counsel’s work. In reality, assessing the fee by way of application of the statutory criteria, and having regard to the comparators put forward, gives rise, in my view, to an appropriate brief fee in the sum of €1,500.00 plus VAT. Accordingly the allowance in respect of this bill of costs is €750.00 plus VAT. Dated the 24th day of February 2012. Declan O’Neill Taxing Master.