Latoya Barrett v Attorney General - Ruling

¶ Ruling. Cause No. 368/08 Latoya Barrett v AG. Coram Quin J. Date: 7.9.2010 Page 1 of 14 IN THE GRAND COURT OF THE CAYMAN ISLANDS 1 HOLDEN AT GEORGE TOWN 2 Cause No: 368/08 3 4 5 BETWEEN: 6 LATOYA BARRETT 7 PLAINTIFF 8 9 AND: 10 THE ATTORNEY GENERAL OF THE CAYMAN 11 ISLANDS 12 DEFENDANT 13 14 15 Appearances: Mr. Christopher McDuff of Thorp Alberga for the 16 Plaintiff 17 18 Ms. Kirsten Houghton of Campbells for the 19 Defendant 20 21 Before: Hon. Justice Charles Quin 22 Heard: 27th July 2010 23 24 RULING 25 26 27

¶ [1] On the 1st June 2010 this Court found that the Defendant was liable for the loss, 28 injury and damage sustained by the Plaintiff in an accident which occurred on the 29 11th July 2008 at approximately 3:25a.m., and further, this Court ordered that 30 costs were follow the event and to be taxed, if not agreed. 31 32

¶ [2] Before this Court is the Plaintiff’s Summons dated the 16th June 2010 seeking the 33 following relief: 34 35 Ruling. Cause No. 368/08 Latoya Barrett v AG. Coram Quin J. Date: 7.9.2010 Page 2 of 14 i. That the uplift figures of 33.3% and 33% in the CFAs between 1 Thorp Alberga and the Plaintiff, and between Thorp Alberga and 2 Mr. Richard Lynagh Q.C. (“Mr. Lynagh”), are reasonable; 3 ii. That the Defendant pays to the Plaintiff the uplift of 33.3% in 4 relation to the Plaintiff’s CFA with Thorp Alberga and 33% in 5 relation to the CFA with Mr. Lynagh; 6 iii. That Section 7.2 of Practice Direction 1 of 2001 entitled 7 “Guidelines relating to the taxation of costs” is not applicable to 8 this award of costs; 9 iv. … 10 v. That the Defendant pays to the Plaintiff an interim payment of 11 the Plaintiff’s legal costs in the amount of CI$50,000; 12 vi. That the costs of this application to the Plaintiff on the standard 13 basis are to be taxed if not agreed; 14 vii. … 15 16

¶ [3] For the time being the Plaintiff is not pursuing the remedies sought in paragraphs 17 iv and vii of her Summons dated the 16th June 2010. 18 19

¶ [4] By way of background I should note that on the 12th November 2008 I granted 20 the Plaintiff and her attorneys – then Myers & Alberga, now Thorp Alberga – 21 permission to enter into a conditional fee agreement, which allowed for an uplift 22 fee of 33.3 percent. And on the 7th December 2009 Henderson J., again hearing 23 counsel for both parties, permitted the Plaintiff and her attorneys to enter into a 24 conditional fee agreement with leading counsel, Mr. Lynagh, with an uplift of 25 33%. 26 Ruling. Cause No. 368/08 Latoya Barrett v AG. Coram Quin J. Date: 7.9.2010 Page 3 of 14 Defendant’s position in relation to Plaintiff’s Summons 1 2

¶ [5] The Defendant does not seek to argue that the uplift figures of 33.3% in the 3 CFAs between Thorp Alberga and leading counsel are unreasonable. Counsel for 4 the Defendant has submitted that whilst the figure of 33% is higher than the 5 guidelines applicable in England (see Callery v. Gray (Nos 1 and 2) [2002] 1 6 W.L.R. 2000), they are not so enlarged as to be unreasonable in light of the 7 different circumstances in the Cayman Islands where the volume of work is much 8 smaller. It is impliedly accepted that the internal conditional agreements with her 9 attorneys are a matter for the Plaintiff. However, counsel for the Defendant has 10 stated that the engagement of a Queen’s Counsel in this matter was entirely 11 unnecessary. 12 13

¶ [6] Furthermore, the Defendant submits that the Q.C.’s fees, admission fees and 14 travel expenses are not recoverable on taxation, and further, under Cayman law, 15 the uplift should not be recoverable. 16 17

¶ [7] The Defendant submits that the question of costs falls to be determined by the 18 taxing officer and should, under O.62 r.9, not be taxed until the conclusion of the 19 cause or matter in which the proceedings arise. Further, under O.62 r.13(2), 20 where the amount of costs is to be taxed on a standard basis, as in this case, “the 21 taxing officer will only allow costs which are not only reasonable, but are also 22 proportionate to the matters in issue – having regard to (a) the amount of money 23 involved, (b) the importance of the case, (c) the complexity of the issues.” 24 25 Ruling. Cause No. 368/08 Latoya Barrett v AG. Coram Quin J. Date: 7.9.2010 Page 4 of 14

¶ [8] The Defendant’s counsel submits that to allow paragraphs ii and iii of the 1 Plaintiff’s Summons would seek to “drive a coach and horses through the 2 legislative framework, both on its face and also in practical terms”, and thus 3 “would fetter inappropriately the exercise of the taxing officer’s discretion under 4 Order 62 rule 13(2).” 5 6

¶ [9] In this regard the Defendant urges this Court not to follow the Ruling of 7 Henderson J. in Bennett v. Attorney General Cause No. 512 of 2006, dated the 8 10th May 2010, and submits that the Court should strictly follow paragraph 7.2 of 9 the Practice Direction and prohibit conditional fee agreements. 10 11

¶ [10] Finally, and in any event, in relation to paragraph v of the Plaintiff’s Summons, 12 the Defendant submits that there is no rule permitting any interim payment on 13 account of costs. 14 15 Relevant Legislative Framework 16 17

¶ [11] I am grateful to both counsel for their helpful skeleton arguments and 18 submissions. I note that counsel for the Defendant stated, “The state of our 19 legislation and rules in relation to costs is far from straightforward, and indeed I 20 would go so far as to say, unnecessarily complex.” 21 22

¶ [12] In 2003 our Court of Appeal in National Trust of the Cayman Islands v. 23 Humphreys (Cayman) Limited [2003] C.I.L.R. 96 at page 201 described the 24 state of the law in the Cayman Islands in respect of conditional fee agreements as 25 “quite unsatisfactory” and “urged the Attorney General and through him, the 26 Ruling. Cause No. 368/08 Latoya Barrett v AG. Coram Quin J. Date: 7.9.2010 Page 5 of 14 responsible executive and legislative authorities to give the matter urgent 1 attention.” Regrettably, the position remains the same today, as it was in 2003. 2 3

¶ [13] However, in order to adjudicate on the relief sought by the Plaintiff in her 4 Summons dated the 16th of June 2010, it is necessary to review and analyse the 5 relevant legislation and rules which are, as the Defendant’s counsel accurately 6 described, “far from straightforward.” 7 8

¶ [14] I begin with Section 24 of the Judicature Law which covers the question of costs 9 and states: 10 11 “24 (1) Subject to the provisions of this or any other Law and to rules of 12 court, the costs of and incidental to all civil proceedings in- 13 (a) the Court of Appeal; and 14 (b) the Grand Court, 15 shall be in the discretion of the relevant court. 16 17 (2) Without prejudice to any general power to make rules of court, 18 such rules may make provisions for regulating matters relating to the costs of 19 those proceedings including, in particular, the entitlement to costs, the 20 taxation of costs, the powers of taxing officers and the powers of judges to 21 review decisions of taxing officers. 22 23 (3) The Court shall have full power to determine by whom and to what 24 extent the costs should be paid…” 25 26

¶ [15] I turn now from the Judicature Law to the Grand Court Law and Section 19, 27 which states: 28 “19 (1) There shall be a Rules Committee, which shall consist of- 29 (a) the Chief Justice, who shall be the Chairman; 30 (b) the Attorney General; and 31 (c) two persons who are entitled to practice as legal 32 practitioners before the Court, who shall be appointed 33 by the Chief Justice after consultation with the Cayman 34 Islands Law Society. 35 … 36 37 Ruling. Cause No. 368/08 Latoya Barrett v AG. Coram Quin J. Date: 7.9.2010 Page 6 of 14 (3) The Rules Committee may, subject to this or any other law, make 1 rules, to be called Rules of Court, for all or any of the following 2 purposes- 3 4 (d) prescribing the fees and costs of legal practitioners in 5 contentious matters, and regulating their taxation…” 6 7

¶ [16] On the 1st January 2002 the Court Costs Rules 2001 which were gazetted on the 8 22nd October 2001 came into force. These rules revoked the old Grand Court 9 (Taxation of Costs) Rules of 1995. The second Explanatory Note to the Court 10 Costs Rules 2001 stated, “GCR O.62 is comprehensively amended and a detailed 11 explanatory memorandum is scheduled hereto.” This note also adds that, “The 12 new GCR O.62 should be read in conjunction with Practice Direction 1 of 2000.” 13 14

¶ [17] It is necessary to refer to this Explanatory Memorandum of the Court Costs Rules 15 in order to fully understand how the new O.62 should be read and interpreted 16 along with Practice Direction 1 of 2001. 17 18

¶ [18] The new O.62 effectively abolished the old adversarial procedure and stated that 19 taxation would become an inquisitorial process, which will normally be 20 completed without any oral hearing, by the taxing officer. 21 22

¶ [19] Paragraph 4 of the Explanatory Memorandum, which is not part of the Order, 23 states that “Rule 4(2) is the key provision” and adds that “…the overriding 24 objective is that a successful party to any proceeding should recover from the 25 opposing party the reasonable costs incurred by him in conducting that 26 proceeding in an economical, expeditious and proper manner unless otherwise 27 ordered by the court.” 28 29 Ruling. Cause No. 368/08 Latoya Barrett v AG. Coram Quin J. Date: 7.9.2010 Page 7 of 14

¶ [20] Paragraph 7(1) of the Explanatory Memorandum highlights that Rule 13(1) “puts 1 the onus on the successful party to establish the reasonableness of the amount 2 claimed, and any doubts are to be resolved in favour of the paying party.” 3 Paragraph 7 adds that Rule 13(2) imposes the concept of “proportionality” and 4 states that, “The amount of costs recoverable must be proportionate to the 5 amount of money involved, the importance of the case and the complexity of the 6 issues.” 7 8

¶ [21] Finally paragraph 12 of this Explanatory Memorandum confirms that “work done 9 by foreign lawyers, (in this case, leading counsel Mr. Lynagh), who have been 10 temporarily admitted, is recoverable on taxation.” 11 12

¶ [22] Paragraph 12 goes on to state, “The overriding principle is that a paying party 13 should not be required to pay more, because a successful party has engaged a 14 foreign lawyer, than he would be required to pay if the successful party had 15 employed only a local attorney. It follows, for example that, (1) travel expenses, 16 hotel expenses and work permit fees will be disallowed; and (2) If the result of 17 employing a foreign lawyer is that two lawyers appear in court when the hearing 18 could equally well have been conducted by one lawyer, one set of fees will be 19 disallowed.” 20 21

¶ [23] I turn now GCR O.62 and in particular GCR O.62 r.9(1) which the Defence relies 22 upon, and which states, “Subject to paragraph (2) the costs of any proceedings 23 shall not be taxed until the conclusion of the cause or matter in which the 24 proceedings arise.” However it is important to note that GCR O.62 r.9(2) states, 25 Ruling. Cause No. 368/08 Latoya Barrett v AG. Coram Quin J. Date: 7.9.2010 Page 8 of 14 “If it appears to the Court when making an order for costs that all or any part of 1 the costs are to be taxed at an earlier stage it may order accordingly.” 2 3

¶ [24] The basis of taxation is set out in GCR O.62 r.13 which states, “On a taxation of 4 costs on the standard basis there should be allowed a reasonable amount in 5 respect of all costs reasonably incurred and any doubts which the taxing officer 6 may have as to whether the costs were reasonably incurred or were reasonable in 7 amount shall be resolved in favour of the paying party; and in these rules the 8 term “the standard basis” in relation to the taxation of costs shall be construed 9 accordingly.” Furthermore GCR O.62 r.13(2) states, “Where the amount of costs 10 is to be taxed on the standard basis, the taxing officer will only allow costs which 11 are not only reasonable but are also proportionate to the matters in issue having 12 regard to (a) the amount involved; (b) the importance of the case; and (c) the 13 complexity of the issues.” 14 15

¶ [25] GCR O.62 r.16 deals with the amount of costs and states, “The amount of costs 16 to be allowed on taxation shall (subject to r.17 and to any order of the court 17 fixing the costs to be allowed) be in the discretion of the taxing officer.” 18 19

¶ [26] GCR O.16 r.2 states, “In exercising his discretion the taxing officer shall have 20 regard to the Guidelines issued by the Rules Committee pursuant to paragraph 3, 21 to all relevant circumstances and in particular to (a) the circumstances of the item 22 or of the cause or matter in which it arises and the difficulty or novelty of the 23 questions involved; (b) the skill, specialised knowledge and responsibility 24 required of, and the time and labour expended by, the attorney; (c) the number 25 Ruling. Cause No. 368/08 Latoya Barrett v AG. Coram Quin J. Date: 7.9.2010 Page 9 of 14 and importance of the relevant documents (however brief) properly prepared or 1 perused; (d) where money or property is involved, its amount or value.” 2 3

¶ [27] For the purposes of this hearing my attention is drawn to GCR O.62 r.18(1) 4 which states, “Work done by foreign lawyers may be recovered on taxation under 5 these rules on the standard basis provided that (a) the foreign lawyer has been 6 temporarily admitted as an attorney; and (b) the work was done after he was 7 admitted.” 8 9

¶ [28] Having reviewed Section 24 of the Judicature Law, Section 19 of the Grand 10 Court Law, the Court Costs Rules 2001, GCR O.62, I now finally turn to Practice 11 Direction 1 of 2001 which was made pursuant to GCR O.62 r.17 and came into 12 force on the 1st January 2002. 13 14

¶ [29] Section 7 is the relevant paragraph in relation to the matter before this Court. The 15 Defendant relies on 7.2 which states, “Amounts claimed on the basis of brief 16 fees, refreshers, lump sums, percentages, conditional fee agreements, 17 contingency agreements, or any basis other than hourly rates will be disallowed.” 18 19

¶ [30] Section 7.3 lays out the hourly rates to be applied for attorneys in the cases of 20 taxation on the standard basis and states that they are maximum rates. 21 22

¶ [31] Paragraph 1 of the Plaintiff’s Summons is no longer an issue because the 23 Defendant accepts that the uplift figures of 33.3% and 33% in the CFAs between 24 Thorp Alberga and the Plaintiff, and between Thorp Alberga and the Plaintiff’s 25 leading counsel, are reasonable. This mirrors the approach taken by myself and 26 Ruling. Cause No. 368/08 Latoya Barrett v AG. Coram Quin J. Date: 7.9.2010 Page 10 of 14 Henderson J. on the 12th November 2008 and the 7th December 2009 1 respectively. 2 3

¶ [32] As a result of the Chief Justice’s decision in Quayum and six others v. Hexagon 4 Trust Company (Cayman Islands) Limited [2002] C.I.L.R. 161 (“Quayum”) 5 these uplifts must receive the approval of the Court. And, for the avoidance of 6 doubt, I confirm that I find the uplifts as between the Plaintiff and the attorneys, 7 and as between the attorneys and their leading counsel to be reasonable in all the 8 circumstances of this case. 9 10

¶ [33] I now wish to take paragraphs ii and iii of the Plaintiff’s Summons together. 11 12

¶ [34] The Chief Justice in Quayum stated at paragraph 62(c): 13 14 “In the present matter – and in others, as a matter of discretion, where there 15 is to be an enhanced fee – a requirement for submission to taxation on the 16 solicitor and own client basis will be imposed, and if appropriate, a cap may 17 be placed upon the quantum of fees recoverable.” 18 19 The Chief Justice went on to add at 62(d): 20 “In an appropriate case the court, as a matter of the exercise of its 21 discretion, can disallow the whole or such part, as it sees fit, of any 22 enhanced fee from the amounts which, upon taxation, the unsuccessful 23 opponent may be required to pay. That is, the fee will be limited to what is 24 reasonable in the circumstances. In this way the potential risk of unfairness 25 to such an opponent can be avoided.” 26 27

¶ [35] The case before this Court is very similar to the case of Bennett v. Attorney 28 General of the Cayman Islands Cause 512 of 2006 where, in the Judgment of 29 Henderson J dated the 10th May 2010 the learned judge also addressed Sections 30 Ruling. Cause No. 368/08 Latoya Barrett v AG. Coram Quin J. Date: 7.9.2010 Page 11 of 14 7.2 and 7.3 of Practice Direction 1 of 2001 and stated at paragraph 18 in 1 reference to the Chief Justice’s Ruling in Quayum: 2 3 “Although the passages quoted are obiter dicta, they appear in a judgment in 4 which all aspects of conditional fee agreements were examined thoroughly. 5 In light of these passages section 7.2 of the “Guidelines” cannot be taken to 6 prohibit the recovery and costs of an uplift. The purpose of section 7.2 is to 7 forbid the assessment at taxation of costs on any basis other than by a 8 consideration of hourly rates and the number of hours spent doing the work. 9 Its focus is the method of assessment. The older approach to taxation – that 10 is, assessment of a fee which is fair and reasonable in all of the 11 circumstances – often paid little, if any, attention to hourly rates or hours 12 worked. Indeed, it is a relatively recent development for attorneys, and 13 particularly for barristers, to even have hourly rates and to keep a record of 14 their hours worked on behalf of a client. Section 7.2 makes the hourly rate 15 approach the only permissible manner of taxation. It does not prohibit uplifts 16 which are themselves calculated on an hourly-rate basis.” 17 18 Henderson J. went on to state at paragraph 19: 19 20 “I am satisfied that the taxing officer may assess the costs here on the footing 21 that the appropriate hourly rates are those which include the uplifts. He does 22 not have to do so because the decision in Quayum provides clearly that it is 23 a matter for his discretion.” 24 25

¶ [36] I concur with Henderson J and state that the Plaintiff is entitled to make the case 26 that the Defendant pays to the Plaintiff the uplift figures of 33.3% in relation to 27 the Plaintiff’s CFA with Thorp Alberga and 33% in relation to the CFA with Mr. 28 Lynagh. 29 30

¶ [37] For the avoidance of doubt I confirm that I follow Henderson J’s Ruling in 31 Bennett v. Attorney General and find that Section 7.2 of the Practice Direction 32 does not prevent the taxing officer ordering the Defendant to pay to the Plaintiff 33 the uplift in accordance with my Ruling dated the 1st June 2010. 34 35 Ruling. Cause No. 368/08 Latoya Barrett v AG. Coram Quin J. Date: 7.9.2010 Page 12 of 14

¶ [38] I find that it is reasonable and common practice for two attorneys to appear in 1 matters such as the case before me in the Grand Court, and frequently it is the 2 case that leading counsel is instructed. I should also add that it would be perfectly 3 reasonable and common practice for leading counsel to be instructed in a case of 4 this nature before the High Court of England and Wales. We must remember that 5 the Plaintiff was faced with a claim where Police Constable (PC) St. Jacques had 6 been found, rather surprisingly, not guilty of careless driving. There was 7 complicated evidence from accident reconstruction experts and it is my view that 8 it was perfectly reasonable for the Plaintiff to instruct her attorneys to retain 9 leading counsel who specialises in personal injury road traffic accidents of this 10 rather complex and unusual nature. 11 12

¶ [39] Finally I turn to paragraph v. of the Plaintiff’s Summons which seeks an interim 13 payment of the Plaintiff’s legal costs in the amount of CI$50,000.00. 14 15

¶ [40] The Defendant’s response to this is that there is no rule permitting such an 16 interim order for costs to be made in the Cayman Islands. 17 18

¶ [41] On the 1st June 2010, having found the Defendant liable for the Plaintiff’s loss 19 and damage, I ordered that the costs are to follow the event and are to be taxed if 20 not agreed. 21 22

¶ [42] Counsel for the Defendant has helpfully assisted the Court by confirming that no 23 appeal against my order has been filed and that she has not received any 24 instructions to appeal my Ruling of the 1st June 2010. 25 26 Ruling. Cause No. 368/08 Latoya Barrett v AG. Coram Quin J. Date: 7.9.2010 Page 13 of 14

¶ [43] I now revert to Section 24 of the Judicature Law in relation to my discretion on 1 costs. Section 24(1) states: “Subject to the provisions of this or any other law and 2 to rules of court, the costs of and incidental to all civil proceedings in the Grand 3 Court shall be in the discretion of the relevant Court.” And Section 24(3) states 4 that: “The Court shall have full power to determine by whom and to what extent 5 the costs are to be paid.” 6 7

¶ [44] To examine this issue I turn to GCR O.62 r.4(2) and remind myself of its 8 “overriding objective” which is that “a successful party to any proceeding should 9 recover from the opposing party the reasonable costs incurred by him in 10 conducting that proceeding in an economical, expeditious and proper manner….” 11 12

¶ [45] GCR O.62 r.4(7)(f) states that: “Orders which the Court may make under this 13 rule include an order that a party must pay costs relating only to a distinct part of 14 the proceedings”, and indeed, GCR O.62 r.4(7)(g) states: “The court may order a 15 party to pay interest on costs from or until a certain date including a date before 16 judgment.” 17 18

¶ [46] These provisions of GCR O.62. r.4(7) seem to support the Plaintiff’s case that 19 she should be entitled to an interim order for costs but, GCR O.62 r.9 seems to 20 put the matter beyond doubt. GCR O.62 r.9(1) states: “Subject to paragraph (2), 21 the costs of any proceedings shall not be taxed until the conclusion of the cause 22 or matter in which the proceedings arise” and then the important provision 23 appearing at GCR O.62 r.9(2) which states: “If it appears to the Court when 24 making an order for costs that all or any part of the costs ought to be taxed at an 25 earlier stage it may order accordingly.” 26 Ruling. Cause No. 368/08 Latoya Barrett v AG. Coram Quin J. Date: 7.9.2010 Page 14 of 14

¶ [47] In light of the stated overriding objective of O.62, Plaintiff’s limited economic 1 means, and in light of the fact that she may have to wait a significant time before 2 the issue of quantum is finally resolved, I find that it is in the interests of justice 3 to allow her the relief she seeks in paragraph v. of her Summons. 4 5

¶ [48] Accordingly, I order that the Defendant pays an interim award for costs in the 6 sum of CI$50,000.00. 7 8

¶ [49] Furthermore, as stated in the Plaintiff’s Supplementary Note at paragraph 5, such 9 an order will, of course, be communicated in the bill of costs for taxation so that 10 there is no prejudice to the Defendant in any event. 11 12

¶ [50] I order that the costs of this application are to be awarded to the Plaintiff in any 13 event and to be taxed if not agreed. 14 15 16 17 18 19 Dated this the 7th day of September 2010 20 21 22 Quin J. 23 Judge of the Grand Court 24