The evidence before the court
14The evidence before me consisted of the affidavits of Judith Horobin of 8 August and 11 September 2013, and the expert reports of Christine Davitt of August and 10 September 2013. Both of these witnesses were cross-examined.
15Ms Horobin, a partner at Turner Freeman, has been a solicitor for 40 years. She is extensively experienced in litigation but stated frankly she knew little about costs appeals and was heavily reliant upon counsel in this regard. It was for this reason, she said in her evidence, that she had letters settled by counsel. By reason of Ms Horobin's frank concession that she relied upon counsel, it was submitted that it was inappropriate that her charge-out rate should be $500 per hour.
16However, litigation skills are skills which relate to the whole range of conduct of litigation. A skilled litigator may be unfamiliar with a particular area of the law, such as admiralty law, defamation, or costs assessments. However, a solicitor at Ms Horobin's level can draw upon her extensive litigation skills, and is entitled to charge a reasonable charge-out rate for the work she has done, particularly since the costs related to proceedings in her specialist area. It should not be the case that a solicitor should be obliged to put down his or her rate because the substantive law is unfamiliar, particularly where the skill the solicitor is bringing to bear relates to issues such as tactical conduct of the case.
17The principle evidence given was the evidence of Christine Davitt. Some of the matters put to her included:
(a)In what circumstances, if any, can travel by a solicitor be charged for? Mr Russo submitted that it was not possible for solicitors to charge, citing Wentworth v Wentworth (Court of Appeal, New South Wales, 21 February 1996, unreported) at pp 23-24 where, Mr Russo told the court, he was the solicitor whose costs were disallowed. However, that was a case where the client opted to be represented by lawyers based some distance away, and turns on its own facts. The issue of allowance for travelling expenses is discussed in some detail in Dal Pont at [17.43]-[17.46]. The law in this area has changed considerably over the decade, with the gradual falling away of the practice of using city agents by reason of email, electronic filing and the like. Ms Davitt stated in her evidence that she followed a ruling by Mr David Hartstein, a costs assessor, who had made a ruling on this issue. That ruling is unavailable to me. However, the principles set out in Dal Pont make it clear that the question is one of whether or not the lawyer's personal attendance is necessary or proper in the circumstances. I consider the travel allowance, in the circumstances, was appropriate for a case where the solicitor's client was dying and the DDT case complex.
(b)Estimates of future costs: These were included as an indication of what would happen in the event that the matter went to assessment. Ms Davitt explained that such costs were included on a future basis to enable parties to discuss what the costs would be if the matter proceeded to assessment. Judges routinely see orders for "costs as agreed or assessed" and for this reason, I have a degree of judicial awareness (as to which, see Bobb v Wombat Securities Pty Ltd (No 2), supra) as to how costs may be agreed instead of assessed. These costs have been removed from the gross sum costs order application and nothing more need be said about them.
(c)Are the costs at the top of the range? The plaintiff had the opportunity to put evidence about costs ranges before me in the timetable for affidavits which I set down. This was not done. Ms Davitt said in her evidence, and I accept, that the rates charged by counsel and by the solicitors in this matter are within the reasonable range. I also accept her statements as to the change in role of the brief to counsel and the "running brief" approach to forwarding material to counsel on a regular basis.
(d)As to counsel's fees, Ms Davitt said, and I accept, that the standard practice for costs assessments is for counsel's memoranda of fees to be provided without an item by item breakdown of their contents. That has certainly been the case in all the costs assessments which have come before me for hearing. I am unaware of there being a practice to the contrary, although Mr Russo assures me that this is the case. I have been unable to locate any authority to support this contention. However, counsel's fees are frequently marked down in assessment, as I have noted from the submissions of Mr Russo, and I propose to take this factor into account when arriving at an appropriate percentage to reduce from the sum in question.
(e)Ms Davitt was cross-examined about how, where a solicitor had charged, for example, 1.25 hours for putting an affidavit together, she could increase this fee (or, for that matter, reduce it). Ms Davitt explained that her role as a costs assessor was to prepare a bill for such charges as were reasonable. There were times when a solicitor would overcharge and she would not put the full amount of time spent in the costs assessment as a claim; she would reduce it to what would be a reasonable figure. This was particularly the case in relation to time spent on issues such as research, or perusals. However, where the solicitor had undercharged, she would increase that figure. Mr Russo put to me that this was a blatant misuse of the costs assessor's role, and that the costs assessor should not interfere with the time costing in this manner. I do not accept this submission. Where a solicitor has noted spending an excessive amount of time on research, for example, or drafting an affidavit, a costs assessor not only could, but should, reduce this to a sum which would be reasonably likely to be assessed as being payable. Although costs assessors are not officers of the Court, they perform a valuable task in terms of filtering and rendering reasonable the costs in litigation. Similarly, where a solicitor has charged less than a reasonable amount, a costs assessor would be entitled to increase that sum.
(f)Are the costs incurred in appointing a litigation guardian following the death of the defendant Mrs Sultana party/party or solicitor and client? I do not accept the submission of Mr Russo that the costs in relation to the death of Mrs Sultana were costs of a solicitor and client nature. The circumstances in which she died, and the executor of her estate needed to be appointed in her place, including the costs of notifying the Court, relisting the matter and delaying the hearing of this costs application, were matters which Ms Davitt stated to be party/party costs, a view with which I agree.
(g)Is an allowance on the "rule of thumb" of 8-10% reduction for party and party costs too little? Ms Davitt said that the range likely to be reduces on assessment was between 5-20%, and that the percentage of 8-10% was based on the amount that was taxed on bills that she herself prepared. Her attention was drawn to costs which she had challenged in relation to a Notice of Objection of Costs in a defamation matter. Ms Davitt pointed out that she had been challenging another costs assessor's costs, and it was for that reason that she had challenged 30% of the costs. I also take into account that it was by no means likely that the whole of the 30% would have been successful on assessment, and also that the proceedings involved were defamation proceedings, where the absence of affidavits and the highly technical nature of the pleadings and complex nature of litigation means that such bills are not an appropriate comparison for costs in relation to a costs assessor's bill.I accept Mr Russo's contention that a sum of more than 8-10% should be deducted. Mr Russo put the percentage as 20-30%. What is important to take into account is that, not only must allowance be made for a percentage being deducted if the bill were to proceed to assessment, but also the savings from the assessment not proceeding (this being the purpose of Ms Davitt's "future costs" estimate) and the convenience of having a lump sum order.