SHEEHAN –V- CORR – THE SUPREME COURT

//SHEEHAN –V- CORR – THE SUPREME COURT

SHEEHAN –V- CORR – THE SUPREME COURT

The case of Isabelle Sheehan (an infant) –v- David Corr [2017] IESC 44 was a Personal Injuries Action which commenced in November 2009 and was compromised in October 2011 for €11.5 million plus costs to be taxed in default of agreement. The Plaintiff’s costs were taxed before The Taxing Master on 12thSeptember 2012. The Taxing Master’s Ruling issued on 7th September 2012. The Plaintiff brought formal written Objections to that Ruling on 27th November 2012 on the basis that the Solicitor’s general instructions fee had been incorrectly assessed. The Taxing Master heard objections over four days from September 2013 to March 2014 and delivered his Ruling on 29th May 2014, in which he had increased the instructions fee.

Thereafter, the Plaintiff launched a Review of the Taxing Master’s decision to the High Court in June 2014 on the grounds that the Taxing Master erred in arriving at his decision following the hearing of objections. The Plaintiff’s Application for Review was heard over three days in the High Court by Kearns P. who delivered his Judgment on 27th February 2015, dismissing the Application for Review.

The Plaintiff then appealed the Order of the President dismissing the Review to the Court of Appeal which was heard on 1st and 2nd March 2016. Judgment was delivered on 10th June 2016 ([2016] IECA 168). The Court of Appeal granted the Appeal brought by the Plaintiff and remitted the matter back to the Taxing Master for a renewed assessment of the appropriate instructions fee. The Court stated that “This should commence with a proper Bill of Costs being drawn up by the [Plaintiff’s] Solicitor’s cost accountant which sets out as fully as possible the time and labour expended by the Solicitor in this case”.

The Defendant then appealed the Court of Appeal decision to the Supreme Court, which dealt with the following issues:-

  1. The content and structure of the Bill of Costs including the particulars of the professional services carried out, the time and labour expended by the Solicitor together with details of an hourly rate for each activity.
  2. The Methodology of the Taxing Master. The Court of Appeal held inter alia, that the Taxing Master erred in refusing the Plaintiff’s Solicitor’s offer to reconstruct time spent on the file.
  3. It was held that there is an obligation on the Solicitor to keep a proper record of time and labour spent. Where a Solicitor fails to do so the Court of Appeal held that they should not get the benefit of any doubt about the estimate of hours spent on the case.
  4. Intangible factors at stated in Order 99 Rule 37 (22) are complexity, difficulty or novelty, skill, specialised knowledge and responsibility. The Court of Appeal held that the Taxing Master ought to have first considered the time and labour expended by the Solicitors, assess the number of hours spent and the seniority of the Solicitor involved, the appropriate hourly rate and then consider the intangibles referred to above.

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  1. It was the Plaintiff’s position that two senior Solicitors were necessary for the proper running of the case and the proper conduct of the negotiations between the parties. The Taxing Master held that this was not necessary or appropriate and allowed a Senior and Junior Solicitor instead. The Court of Appeal held the Taxing Master erred in this finding.
  2. Insofar as the Taxing Master assessed an overall instructions fee and then reduced it because of the economic downturn. It was held by the Court of Appeal that the Taxing Master was entitled to take economic circumstances into account, but that he should take it into account at all levels of his assessment of the instructions fee to include, assessing the hourly rate, the charge for a specified professional service and his final assessment of the instructions fee as a whole.

The Supreme Court resolved that the following questions were to be determined for the Hearing of the Appeal:-

  1. To what extent, if any, may considerations as to the amount of time actually spent on a case be elevated above the relevant criteria mandated by Order 99, Rule 37(22) for the fixing of costs?
  2. If the amount of time spent is a central part of the analysis for the Taxing Master in assessing costs, should the Taxing Master allow a retrospective construction of the time spent on a case and if so in what circumstances?
  3. Is it within the discretion of the Taxing Master to disallow the costs of two Solicitors in dealing with part of a case, and if so how may that discretion be reviewed by a Court?
  4. To what extent, if at all, are the general economic conditions relevant to the instruction or Brief fees, and if so relevant, how is that economic circumstance to be assessed?

The answer to the above four questions above were provided by the Supreme Court as follows:-

  1. “As a general proposition the amount of time actually spent on a case should not be elevated above the relevant criteria mandated by Order 99, Rule 37(22)
  2. The Taxing Master has the power to allow, or direct, the production of retrospective reconstruction of time spent. Such power is a discretionary power which should be exercised having regard to all the relevant circumstances.
  3. It is within the discretion of the Taxing Master to disallow the costs of two Solicitors dealing as part of a case. That discretion should be exercised by the Taxing Master in a manner which enables him to perform the function conferred on him by S.27 of the Act of 1995 and Order 99 of the Rules, as he is required by law to do, and he must do so in a manner which he considers to be fair and reasonable.
  4. General economic conditions are relevant to the proper assessment of the Solicitor’s general instructions fee, or a Barrister’s Brief fee. The impact of change in the economic climate on such fees is to be assessed by reference to appropriate evidence”.

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In general, the Supreme Court determined that, the methodology which the Court of Appeal directed should be adopted in the preparation of the Bill of Costs by the Legal Costs Accountant and by the Taxing Master in assessing the instructions fee was incorrect. The Bill of Costs presented by the Plaintiff in this case as regards form and content was not inconsistent with the Rules. It was further held that in assessing the general instructions fee, the manner in which a Taxing Master should properly ascertain the nature and extent of the work done by a Solicitor and exercise his discretion in allowing or disallowing the fee claimed, is pursuant to the Judgment in C.D. –v- Minister for Health and Children & Another [2008] IEHC29 and not as directed by the Court of Appeal in it’s Judgment in this matter.

Essentially the Taxing Master should have due regard to Order 99 Rule 37 (22) and S.27 of the Courts and Court Officers Act 1995, together with the principals set out in CD. The primacy given to “time” as a factor by the Court of Appeal was reversed. While the Supreme Court held that there is no requirement in law that a Solicitor or Barrister must keep time records, it may be prudent to do so.

2018-09-18T19:21:27+00:00February 28th, 2018|News|