Burgess v J Breheny Contracts Ltd [2009] EWHC 90131 (Costs)

Posted on Friday, January 16th, 2009

This was a case regarding the detailed assessment of the Claimant’s after the event insurance premium, the costs of preparing the bill of costs and the success fee relating to the preparation of the bill.

The Defendant admitted primary liability around five months prior to the premium being taken out and therefore argued that the premium was unreasonable and in the alternative, was excessive, at £2,730 (settlement had been agreed in the sum of £1,500). In addition, the Defendant argued that with regards to the bill of costs, it was both unreasonable and disproportionate to prepare the same for assessment when there was only one item disputed. If, however, the costs of preparing the bill were allowed, then a success fee of 20%, rather than the 62.5% claimed in the Bill, was more appropriate.

The Claimant submitted that although breach of duty had been admitted, causation still remained an issue. There were also the risks of the Defendant withdrawing its admission of breach of duty, the Defendant making a Part 36 offer which was not accepted by the Claimant and failed to beat, failing to recover a disbursement and the risk of an adverse costs order. Avril – v – Boultby was referred to.

Master Haworth concurred with the decision in Avril – v – Boultby and stated that the risks were real, not illusionary or fanciful and that he did not regard himself as being ‘better qualified than the underwriter to rate the financial risk the insurer faces’. In addition, Master Haworth stated that in very broad brush terms, he did ‘not have the expertise to judge the reasonableness of a premium’ and the Defendant had not provided any evidence that any cheaper premiums existed. However, it was considered that the preparation of the bill and the success fee were disproportionate as they were the only issues at stake and both were therefore disallowed.


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