Relevance of estimates to assessments

Leigh v Michelin Tyre plc [2003] EWCA Civ 1766

The claimant’s solicitors filed an allocation questionnaire in which it said that it estimated the claimant’s solicitors’ profit costs to date at £3,000 plus VAT, and their overall profit costs as likely to be £6,000 plus VAT. The Practice Direction in force at that time (February 2000) did not state that the estimate should include disbursements in accordance with the definition of ‘costs’ in CPR rule 43.2(1)(a). The Practice Direction has since been changed to spell out that estimates must include disbursements. The claimants’ solicitors never revised their estimates. In the event, the litigation was settled for £48,000, and the claimants lodged a bill in which they claimed £21,741.28. This comprised £14,482.80 in respect of profit costs, £4,314.70 for disbursements and £2,943.78 for VAT. The first of these figures included £11,744 for profit costs in respect of the period after the allocation questionnaire stage. This should be compared with the estimate of £3,000 given at the allocation questionnaire stage for future solicitors’ profit costs. The district judge assessed the claimant’s recoverable costs at £20,488.83 inclusive of VAT. He made no deduction to reflect the fact that the claimant’s solicitors had previously given what proved to be a wholly inadequate estimate for their future profit costs.