Case No. UKUT-0269-(LC)

58. Submissions on costs have now been received only from the acquiring authority, which seeks an order that the claimants bear their own costs in the reference, and to pay its costs incurred since 21 March 2017, the date upon which three unconditional offers were made. None of those offers, which were made pursuant to section 4 of the Land Compensation Act 1961 and copied to the Tribunal in sealed envelopes for opening only after the compensation had been determined and the question of costs was being considered, were exceeded in the determination dated 23 June 2017. 59. The offers were in the following terms:(1) First claimant (Mustafa Behic): £165,000 in full and final settlement (Tribunal’s determination £163,250)(1) Second claimant (Mermer Ltd): £40,000 (Tribunal’s determination £31,485)(1) Third claimant (Orhan Behic): £7,000 (Tribunal’s determination £5,987) Each of the offers also contained the following provisions:“2. To pay the claimants’ professional fees and expenses incurred in respect of the preparation and negotiation of the claim up to the date of the making of the Reference3. To pay the claimants’ professional fees and expenses incurred in respect of the Reference between the date of the making of the Reference and the date of this letter [21 March 2017]; and 4. To bear its own costs in respect of the Reference incurred up to the date on which the compensation is paid to you.” 60. The offers were stated to remain open for acceptance until 4pm 5 April 2017 and it was made clear that that if they were not accepted by that date, condition 4 would cease to be a term of the offer. Terms (1) to (3) would remain open subject to the claimants paying the acquiring authority’s costs, fees and charges from the date of the offer. 61. It was submitted that there were no special reasons which the Tribunal could rely upon to depart from the general rule in section 4(1)(a) of the 1961 Act which provides: “4 – (1) Where either-(a) the acquiring authority have made an unconditional offer in writing of any sum as compensation to any claimant and the sum awarded by the Upper Tribunal (Lands Chamber) to that claimant does not exceed the sum offered; or…The Upper Tribunal (Lands Chamber) shall, unless for special reasons it thinks proper not to do so, order the claimant to bear his own costs and to pay the costs of the acquiring authority so far as they were incurred after the offer was made or, as the case may be, after the time when in the opinion of the Upper Tribunal (Lands Chamber) the notice should have been delivered.” 62. The acquiring authority therefore sought a summary assessment of its costs by the Tribunal in accordance with a detailed statement and schedule of costs incurred since 21 March 2017 which was enclosed with the submissions. The costs, per its calculations, totalled £25,530.64 (net of VAT). Whilst I agree that in the circumstances the claimants must be liable for the acquiring authority’s reasonable costs from that date, I am concerned that there were many mathematical errors in the documentation provided, some of which I found impossible to fathom, and I cannot therefore accept them as a reliable basis upon which make a fair determination. 63. For example, the acquiring authority’s attendance costs were broken down into three sections: attendances on acquiring authority, attendances on claimants and attendances at hearing and amounted to 10.72 hours at £115 per hour which equates to £1,232.80. However, the sub-totals shown on the schedule add up to just £898.50. The totals column of the ‘work done on documents’ section produced a further £1,299.50, but the sub-total figures under each head bore no relation to the number of hours allegedly spent. The sub-total for all DWF’s hourly costs was recorded as £2,418.50 which again bore no relation to the sub-totals produced under each head which I calculate at £2,198.64. Further, the acquiring authority’s in-house legal costs were claimed in the sum of £2,356.00 but the detailed breakdown amounted to just £1,411.60. Doing the best that I can on the information provided, my summary of the costs claim as made is: DWF LLP Solicitors’ costs & disbursements: Attendances on acquiring authority £ 276.00 Attendances on claimants £ 173.50Attendances at hearing £ 449.00Work done on documents £1,299.50 £ 2,198.00Disbursements: (Counsel’s fees) Advice on documents/conference £2,833.00 Fee for hearing £5,000.00 £ 7,833.00(Expert’s fees) Preparation for hearing and attendance £7,505.85 Additional work re: 2nd claimant £ 686.25 £ 8,192.10 (Other expenses) Hearing fee £4,021.26 Special/recorded deliveries £ 130.70 Travel £ 467.34 Misc. expenses £ 121.00 £ 4,740.50 Total DWF £22,963.60 Acquiring Authority’s in-house costs Correspondence/telephone/documents/travel and attendance at hearing. £ 1,411.60Grand Total £24,375.2065. As most the costs could not be readily ascribed or attributed to a particular claimant, it was suggested that the burden of costs (except the £686.25 expert’s costs specifically relating to the second claimant that should be wholly charged to Mermer Ltd) should in fairness be apportioned between them in proportion to the amount of compensation awarded. I accept in principle that the division suggested is a sensible and proportionate resolution to the question of liability for costs. A further schedule was produced showing the intended distribution, but again that failed to attribute the specific expert’s costs to the second claimant referred to above, and the calculations which were, of course, based upon the incorrect totals under each head did not in any event add up to the total of the individual figures sought. 66. Of much greater concern to me was the amounts claimed which in my view are overstated to a considerable degree and wholly out of proportion to the matters in hand. For instance, DWF has claimed hourly rates for work carried out by Grade A, Grade B, Grade C and Trainee Solicitors all in the same amount (£115 per hour) and as I have said none of the figures tally up. As to disbursements, I find counsel’s fees of £5,000 for attendance at the hearing which, due to the claimants’ failure to turn up, lasted no more than 40 minutes, to be excessive in the extreme. As to the claim of £7,505 relating to costs allegedly incurred by the valuation expert since 21 March, the schedule provided includes almost £5,000 under the headings of “preparation for hearing” and a further £607.50 for “review [of] RICS Practice Statement: Surveyors Acting as Expert Witnesses”. This last item I find to be totally incredible. It is up to the expert to keep up to date and accord with the RICS requirements, and it is not a cost which can be recouped from the claimants. The additional preparation costs are in my judgment again excessive and unjustified. The expert’s attendance costs at the hearing were not unreasonable in the amount claimed. 67. In the light of these comments, I determine that the costs to be awarded against the claimants shall be in the sum of £15,838.35 made up as to DWF attendance costs £2,000.00, DWF’s other expenses (including the hearing fee) £4,740.50, counsel’s fees £4,000.00, valuation expert’s fees £3,686.25 (with the £686.25 being the extra costs applying only to the second claimant) and the acquiring authority’s in-house legal costs at £1,411.60. The apportionment I calculate as follows: Claimant 1: £15,152.10 x 81.18% = £12,300.48 Claimant 2: £15,152.10 x 15.84% = £2,400.09£686.25 x 100% £ 686.25 £ 3,086.34 Claimant 3 £15,152.10 x 2.98% = £ 451.53 £15,838.35 68. The costs as set out above, which are determined net of VAT (upon which no submissions have been received), shall be deducted from the compensation payable in accordance with the provisions of s.4(5) of the 1961 Act. The acquiring authority is invited to make submissions on the question of VAT within 7 days of the date of this addendum before this decision can be made final in all respects. DATED 4 August 2017 P R Francis FRICS SECOND ADDENDUM 68. No further submissions relating to VAT having been received within the allotted timescale, it is confirmed that this decision is now final in all respects. Dated 29 August 2017 P R Francis FRIC