Introduction

In the recent decision of McNamee v LB Brent [2025] EWHC 2612 (SCCO), Costs Judge Whalan delivered a significant judgment on two key issues in the context of detailed assessment: the scope of recoverable costs under a consent order, and the threshold for solicitor misconduct under CPR 44.11. The case provides important guidance on the interpretation of consent orders in multi-defendant litigation and the standards expected of legal representatives during pre-assessment cost negotiations.

Background

The underlying claim arose from a tripping accident on 29 January 2019, in which the claimant sustained serious injuries after falling on a broken paving slab. Proceedings were issued against three defendants: the London Borough of Barnet, the London Borough of Brent, and Keith Bailey & Co (Travel) Ltd. The claims against the first and third defendants were discontinued, and the matter proceeded to trial against LB Brent alone.

Shortly before trial, the parties reached a settlement. A consent order sealed on 23 February 2024 provided for payment of £26,000 in damages by LB Brent, along with the claimant’s costs “to be assessed if not agreed.” The order also included provisions for discontinuance against the other defendants with no order as to costs, and a Sanderson order requiring LB Brent to pay £7,000 towards the first defendant’s costs.

Issue 1: Scope of Recoverable Costs

The first issue before the court was whether the claimant was entitled to recover from LB Brent the entirety of her costs incurred in the action, including those relating to the discontinued claims against the first and third defendants.

Counsel for the defendant argued that the consent order’s plain wording limited recovery to costs incurred solely against LB Brent. He relied on the absence of any express provision for recovery of costs against the other defendants and cited Medway Oil & Storage Co Ltd v Continental Contractors Ltd (1929) AC 88 to support a restrictive interpretation.

Conversely, the claimant’s counsel contended that the order’s reference to “the Claimant’s costs” was deliberately broad and encompassed all costs reasonably incurred in the course of the litigation, including those against the other defendants. She argued that the structure of the order, particularly the inclusion of a Sanderson order, supported this interpretation.

Costs Judge Whalan agreed with the claimant. He held that the consent order permitted recovery of all reasonable and proportionate costs incurred in pursuing the claims against all three defendants. The judge emphasised that paragraph 2 of the order did not limit recovery to costs against LB Brent and that the inclusion of a Sanderson order (requiring LB Brent to pay the first defendant’s costs) implied an acceptance of broader cost liability. The judge also noted that the discontinuance against the other defendants did not preclude recovery of those costs from LB Brent, as the order did not contain a Bullock order, which would have shifted costs responsibility to the claimant.

Issue 2: Solicitor Misconduct under CPR 44.11

The second and more contentious issue concerned the conduct of the claimant’s solicitors during pre-assessment cost negotiations. The defendant alleged that the claimant’s legal representatives had engaged in misconduct by submitting an informal statement of costs that significantly overstated the claimant’s actual entitlement.

The informal statement, served on 18 March 2024, claimed £208,583.76 in costs. However, the formal bill of costs served with the Notice of Commencement on 24 July 2024 totalled only £140,430.60. The defendant argued that this discrepancy—amounting to a 62% inflation—was not only unjustifiable but also indicative of “unambiguous impropriety” under CPR 44.11(1)(b). Specific criticisms included:

  • Use of hourly rates up to 25% higher than those agreed in the retainer;
  • Misclassification of a fee earner’s grade (claiming Grade A rates for a solicitor not of that seniority throughout the relevant period);
  • Overstatement of time spent, including 120.9 hours of additional, irrecoverable time;
  • Presentation of the statement with a veneer of precision, suggesting it was not a rough estimate.

The claimant’s solicitors accepted that the statement was exaggerated but maintained that the errors were inadvertent and not intended to mislead. They argued that the statement was prepared by a solicitor without costs training, who adopted a “broad brush” approach based on her understanding of the file.

Costs Judge Whalan acknowledged that informal cost negotiations are inherently imprecise and often conducted under time pressure. However, he stressed that there must be limits to acceptable conduct. He found that the scale of the exaggeration in this case—both in monetary terms and in the nature of the errors—crossed the threshold of unambiguous impropriety. The judge concluded that the conduct amounted to misconduct under CPR 44.11(1)(b), even though it occurred in the context of “without prejudice” communications.

In determining the appropriate sanction under CPR 44.11(2), the judge considered the case law, including Bamrah v Genpride Ltd [2018] EWCA Civ 1367, where a 50% reduction in profit costs was upheld for similar conduct. He also referred to Ikin v Shawbrook Bank Ltd [2022] EWHC 1075 (SCCO), where a 60% sanction was imposed for fictitious billing.

Applying these principles, Judge Whalan imposed a 50% reduction on the claimant’s assessed costs. He found that the misrepresentation was gross, fundamental, and intended to induce the defendant to settle at an inflated figure. While he accepted that the errors reflected systemic failings rather than individual dishonesty, the conduct nonetheless warranted a significant sanction.

Conclusion and Implications

This judgment is a cautionary tale for legal practitioners involved in costs litigation. It underscores the importance of accuracy and integrity in all stages of the costs process, including informal negotiations. While the court recognises the practical constraints of pre-assessment discussions, it will not tolerate gross exaggeration or misrepresentation, even if unintentional.

The decision also clarifies the interpretation of consent orders in multi-defendant litigation. Where an order refers broadly to “the claimant’s costs” and includes a Sanderson order, the court may infer an intention to permit recovery of all costs reasonably incurred in the action, including those against discontinued defendants.

For costs lawyers and litigators, McNamee v LB Brent serves as a reminder that the standards of professional conduct apply equally to informal stages of litigation. Solicitors must ensure that any cost estimates or offers are grounded in accurate records and reflect a fair approximation of the client’s entitlement. Failure to do so may result in significant financial penalties and reputational damage.