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Litigants in Person, Costs Budgeting and McKenzie Friends: A Practical View from the Bar

In his monthly column, James Bickford Smith discusses two important decisions concerning respectively the applicability of costs budgeting rules to litigants in person and the court’s approach to attempts to control a litigant’s choice of McKenzie friends.

Reproduced from Practical Law with the permission of the publishers. For further information visit www.practicallaw.com or call 020 7542 6664. 

CONTENTS

  • Campbell v Campbell [2016] EWHC 2237 (Ch)
    •    Costs budgeting
    • CPR 46.5 and the two thirds rule
    • The wider approach to “unorthodox” representation
  • Leigh Ravenscroft v Canal & River Trust [2016] EWHC 2282 (Ch)
    •    Comment

In June 2015, this column addressed some of the practical challenges of dealing with litigants in person (see Article, Dealing with litigants in person and McKenzie friends, some recent cases: A practical view from the Bar). The suggestion in that column, that corresponding with and litigating against litigants in person was becoming increasingly commonplace, now seems an understatement. The courts have continued to see a marked growth of the number of litigants in person. However, numbers alone may not tell the whole story. For that reason this column focuses on one phenomenon that has attracted particular practitioner attention: the number of significant High Court actions
being conducted “in person”. The reason that inverted commas are used is because a litigant in person can be someone who intends:

  • To conduct and present their case alone.
  • To have a Direct Access barrister present their case, and perform the tasks ancillary to its conduct. 
  • To be represented by a McKenzie friend.

These distinctions are not absolute and it is perfectly possible for the same litigant in person to move through the above phases during the same action. They are nevertheless helpful insofar as they highlight the fact that while much of the literature (and practitioner shorthand) assumes that a litigant in person falls into the first of these categories, this is no longer a sensible working assumption.

Of course, this will not come as news to those who have experience of County Court disputes. However, these distinctions are coming into sharper focus in the High Court: there is now a discernible phenomenon of sophisticated litigants conducting cases in person before the High Court. This can pose a significant logistical and practical challenge for opposing parties. Those challenges may explain the degree of surprise and disquiet at this phenomenon among some practitioners. Having the stereotype of the High Court litigant in person as the individual arriving outside Court 36 of a Friday afternoon, with the intention to injunct the Prime Minister, does not assist in dealing with the appearance at court of a Queen’s Counsel complete with junior clerk and a series of neatly compiled bundles.

As the courts come to terms with this phenomenon, one practical issue that has come into focus concerns costs and cost management. Another relates to the issue of control of a litigant’s choice of McKenzie friend. These are the issues addressed in the two cases discussed in this column.

CAMPBELL V CAMPBELL [2016] EWHC 2237 (CH)

 The decision in Campbell v Campbell [2016] EWHC 2237 (Ch) arose in the context of an ongoing partnership and joint venture dispute in which the sums potentially in issue were over £10 million (see Legal update, Guidance on costs management and litigants in person (High Court)). The claimant in the action had retained solicitors but filed a notice of change some way into the action and began to act as a litigant in person. However, he was planning to conduct the claim with the assistance of:

  • A QC instructed by Direct Access.
  • A Jersey solicitor.
  • A Junior Counsel not qualified to accept Direct Access instructions but intending to be instructed by the Jersey solicitor.

To complicate the position still further, after the High Court had ruled on a preliminary issue that the services provided by the Jersey solicitor through his firm did not constitute “legal services” within the meaning of CPR 46.5(3)(b), and as such were irrecoverable as costs, the Jersey solicitor revived his English practising certificate but did not intend to take on the conduct of the claim.

As the above scenario reads rather like an exam script, it is unsurprising that the case raised a number of issues of principle concerning costs recovery by litigants in person. These included:

  • Whether the claimant should be subject to costs management.
  • If so, what format the budget should take (given that some rules expressly contemplate that the filer of a budget should be a solicitor with conduct).
  • Whether the Jersey solicitor’s fees could be recovered.
  • Whether the Junior Counsel’s fees were disbursements or costs.
  • Whether the two thirds rule (which caps recovery of costs by solicitors not having conduct) applied to the Jersey solicitor or the Junior Counsel.

The court’s discussion of these issues is, on any view, dense with detail. Accordingly, it seems sensible to focus on the key points in the decision.

Cost Budgeting

CPR 3, Practice Direction (PD) 3E and the related forms contain provisions concerning the preparation of costs budgets by litigants in person that are not easy to reconcile. The court’s decision was that while the default provisions for costs budgeting in CPR 3.13 exclude litigants in person:

“… a litigant in person may opt to serve and ? le a budget, or the court may order a litigant in person to do so. Furthermore, the court may decide to make a costs management order in relation to a litigant in person’s budget. Indeed, in a case in which a litigant in person is likely to be seeking a substantial costs order, whether because there will be fees of counsel under the Direct Access scheme or otherwise, it may well be desirable to do so.”
(Campbell v Campbell [2016] EWHC 2237 (Ch), at paragraph 18.)

The court accepted that the Form/Appendix H format would likely need to be adapted in such circumstances but pointed out that the practice direction provided expressly for alternative formats. Accordingly, it seems that the appropriate course in a case whose level of costs merits it would be for those acting on a direct access or non-standard basis to seek permission to serve a bespoke budget.

CPR 46.5 and the two thirds rule 

The distinction between costs and disbursements matters in the case of litigants in person because the former are capped at two thirds of the rate “which would have been allowed if the litigant had been represented by a legal representative” (CPR 46.5(2)). A further distinction is between payments “relating to the conduct of the proceedings” and payments “for” the conduct of proceedings. The former is more generally described as payments for assistance. When faced with the question of whether these were as a matter of principle recoverable by a litigant, the court held that they were because:

“The Direct Access scheme, whether it is used for advocacy or other assistance, provides a litigant in person with expertise which may be essential to be able to progress a claim in an orderly manner and is likely to be of assistance to the court for that reason. Similarly, it is clearly contemplated that a litigant in person may pay for and recover the cost of “legal services” relating to the conduct of the proceedings. In a complex claim, the litigant in person may wish, for example, to obtain assistance with disclosure or the drafting of witness statements. This is part of the unbundling of legal services contemplated by Lord Woolf.”
(Campbell v Campbell [2016] EWHC 2237 (Ch), at paragraph 32.)

The court left open the question of whether such assistance fees would be subject to the two thirds cap. 

The wider approach to “unorthodox” representation

The defendant advanced a number of objections of principle to the recoverability of some types of costs by the claimant as litigant in person. The overarching submission was that the difficulties faced by the claimant were of his own making, he could easily resolve these by instructing an English law firm to come on the record, and his “unorthodox approach” amounted to “playing the system”. The court rejected this argument flatly:

“The starting point is that the claimant is entitled to act in person and does not need to justify his decision to conduct the litigation himself. He is also entitled to conduct the litigation with assistance from lawyers. The only issue is whether he may recover their costs under CPR 46.5.”
(Campbell v Campbell [2016] EWHC 2237 (Ch), at paragraph 41.)

This ties in with the broader lesson to take from this decision, namely that in place of the rather quizzical approach of past years, the courts are now working through the practical case management issues thrown up by a host of non-standard representation arrangements.

LEIGH RAVENSCROFT V CANAL & RIVER TRUST [2016] EWHC 2282 (CH)

At issue in Leigh Ravenscroft v Canal & River Trust [2016] EWHC 2282 (Ch) was another non-standard representation arrangement. The claimant had fallen into disagreement with the defendant, Canal & River Trust, about whether he was obliged to have a Pleasure Boat Certificate for a boat moored on an inland waterway. The substantive issue of law, which turned on the construction of the words “main navigable channel” and its extent, was sufficiently important to go to trial in the Chancery Division as a Category A case. However, the claimant was in no position to afford legal representation. At this stage, he received an offer from a third party with considerable experience of acting against the defendant. That third party was not a lawyer but was seeking to act as a McKenzie friend. The defendant objected to this.

The claimant’s basis for requesting permission that the third party be allowed to act as McKenzie friend was that:

  • He (the claimant) was largely illiterate and therefore had difficulty reading and understanding the statutory and other background material.
  • His emotional involvement with the issues made it impossible for him to deal with the matter calmly.
  • He had no funds with which to engage professional representation and the third party agreed to provide help without any reimbursement.
  • The third party had a great deal of relevant experience and knowledge.

The defendant’s objections were that:

  • The third party had been criticised for his “relentless and obstinate” approach in previous High Court litigation.
  • The third party had not met a number of costs orders.
  • The third party had been campaigning on social media about the claim.
  • The third party had become a professional McKenzie friend.

The court granted permission for the third party to act because:

  • The claimant needed the assistance of a McKenzie friend given that he was largely illiterate.
  • The legal aspects of the claim “are highly technical and involve the construction of the expression main navigable channel as used in the British Waterways Act 1971”.
  • There would be a significant inequality of arms if the claimant were to have been deprived of McKenzie friend assistance.
  • It would have been unfair to insist that the claimant find a different McKenzie friend.

Comment

This decision underlines the willingness to accept and work through the practical consequences of non-standard representation arrangements. However, it also serves to highlight the ongoing and challenging question of how willing the courts are to intervene so as to control McKenzie friends and litigants’ choice of them. The question of what effect the involvement of such figures will have on the costs of the opposing party still seems very low on the list of issues that courts consider when faced with such applications.

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