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Judgment
Title:
Sheehan -v- Corr
Neutral Citation:
[2017] IESC 44
Supreme Court Record Number:
94/2016
Court of Appeal Record Number:
2015 141
Date of Delivery:
06/15/2017
Court:
Supreme Court
Composition of Court:
Denham C.J., O'Donnell Donal J., McKechnie J., Clarke J., Laffoy J.
Judgment by:
Laffoy J.
Status:
Approved
Result:
Other
Details:
Discharge order of the Court of Appeal. Remit to Taxing Master.
Judgments by
Link to Judgment
Concurring
Laffoy J.
Denham C.J., O'Donnell Donal J., McKechnie J., Clarke J.



THE SUPREME COURT
[Appeal No. 94/16]

Denham C.J.
O’Donnell J.
McKechnie J.
Clarke J.
Laffoy J.
      BETWEEN
ISABELLE SHEEHAN (AN INFANT SUING BY HER MOTHER AND NEXT FRIEND CATHERINE SHEEHAN)
PLAINTIFF/RESPONDENT
AND

DAVID CORR

DEFENDANT/APPELLANT

Judgment of Ms. Justice Laffoy delivered on the 15th day of June, 2017

Outline of background and judicial process to date
1. This appeal from the Court of Appeal raises very important questions in relation to the taxation of a party’s costs in litigation and, in particular, the taxation of the solicitor’s instructions fee. The costs the subject of the taxation at the root of this case were the costs of the plaintiff in the underlying High Court proceedings, which by order of the High Court made on 26th October, 2011 the defendant was ordered to pay when taxed.

2. The claim in the underlying High Court action, which was commenced by way of a personal injuries summons which issued on 17th November, 2009 (Record No. 2009/10344P), was a claim by the plaintiff, an infant suing by her mother and next friend, against the defendant, a consultant obstetrician, for damages for alleged negligence in the management of the ante-natal care of the plaintiff’s mother, which it was alleged resulted in the plaintiff suffering catastrophic birth injuries, ultimately developing cerebral palsy and being left with profound disability. As is recorded in the earlier judgments of the High Court and the Court of Appeal, at the pleading stage in the proceedings in the High Court negligence was admitted, but the defendant raised causation as a defence. Causation remained an issue until approximately five weeks before the hearing of the action, which was due to commence in the High Court on 18th November, 2010, when the defendant conceded the issue of causation and an amended defence was delivered. Accordingly, the issue for determination at the hearing, which commenced on 19th October, 2011, was assessment of damages. Having been at hearing for five days in total, the action was settled on an interim basis pending the enactment of legislation governing periodic payment orders. The amount of the interim settlement was €1.9m. The interim settlement was ruled on by the High Court (O’Neill J.) by order dated 26th October, 2011, which also included the order that the plaintiff recover against the defendant the costs of the action, which were to be taxed in default of agreement. This Court was informed that the action ultimately settled for €11.5m.

3. In the interests of clarity, I propose, throughout this judgment, to refer to the parties to the taxation process and the review procedures which ensued as they were described in the underlying High Court proceedings, that is to say, as the plaintiff and the defendant.

4. A bill of costs prepared by Anthony E. McMahon, Legal Costs Accountants, was presented by the plaintiff’s solicitors to the defendant’s solicitors for taxation pursuant to the order of the High Court dated 26th October, 2011. The amount claimed in the bill of costs for the “general instructions fee” was €485,000. The matter came on for taxation before Declan O’Neill, Taxing Master ("the Taxing Master") on 11th and 12th September, 2012. The Taxing Master issued a ruling on 7th November, 2012 in relation to the instructions fee and certain other items in the bill of costs which are not at issue on this appeal. The outcome of the ruling in relation to the instructions fee was that it was measured at €270,000. Following the ruling, the plaintiff brought objections in writing dated 27th November, 2012 before the Taxing Master in which it was asserted that, inter alia, the solicitor’s instructions fee had been incorrectly assessed and that the allowance was inadequate and unjust. The Taxing Master heard the objections over three days and into a fourth day from September 2013 to March 2014. The Taxing Master delivered his ruling on the objections on 29th May, 2014. The outcome in relation to the solicitor’s instructions fee was that he increased it to €276,000, the increase of €6,000 being allowed to take into account the attendance of a senior solicitor and the notional attendance of an assistant solicitor at court for all of the days of the hearing in the High Court.

5. The ultimate source of this appeal is an application brought by the plaintiff in the High Court in June 2014 for an order pursuant to Order 99, rule 38(3) of the Rules of the Superior Courts 1986 ("the Rules") reviewing the ruling of the Taxing Master in respect of, inter alia, the solicitor’s general instructions fee, on the grounds that the proceedings before the Taxing Master were unsatisfactory and that the Taxing Master was in error in arriving at his decision following the hearing of the objections. The plaintiff’s application for review was heard over three days in the High Court by Kearns P. who delivered judgment on 27th February, 2015 ([2015] I.E.H.C. 99). Dismissing the application for review, Kearns P. summarised his conclusions as follows (at p. 44):

      “The Court cannot recall any previous case where the process of taxation was canvassed to such extraordinary lengths and in such exhaustive detail. It is impossible in this judgment to address every detail of every argument, every document and every piece of evidence tendered in the hearings before the Taxing Master.
The Court has identified some errors made by the Taxing Master but none are such, in the opinion of the Court, to warrant any interference in the allowance made in respect of the solicitor’s instructions fee in this case.”
      In the order of the High Court, made on the 6th March, 2015, and perfected on 8th March, 2015, the decision of the Taxing Master was affirmed, and the costs of the application to review were granted to the defendant, with a stay on the order for costs pending the determination of the next appeal.
6. The next appeal was the plaintiff’s appeal to the Court of Appeal. That appeal was heard by the Court of Appeal (Peart J., Irvine J. and Cregan J.) on 1st and 2nd March, 2016. Judgment was delivered on 10th June, 2016 by Cregan J. ([2016] I.E.C.A. 168). In the judgment, which will be considered in detail later, seven grounds of appeal on which the plaintiff relied are identified and each is addressed. In relation to four of those grounds, the first, second, fourth and seventh ground, the Court of Appeal found that there had been an error on the part of the High Court. Those grounds are summarised in the judgment (at para. 17) as follows:
      1. The first ground is referred to as the issue of “Time” – that Kearns P. erred in failing to regard the Taxing Master’s approach to time as an error that resulted in injustice within the meaning of s. 27 (3) of the Courts and Court Officers Act 1995, ("the Act of 1995").

      2. The second ground is referred to as the issue of “intangibles” – that Kearns P. erred in failing to regard the Taxing Master’s findings on novelty, complexity, skill, specialised knowledge and responsibility (as intangibles) as an error that resulted in injustice within the meaning of s. 27 (3) of the Act of 1995.

      3. The fourth ground is referred to as the two “senior solicitors” issue – that Kearns P. erred in failing to regard the Taxing Master’s disallowance of two senior solicitors at the hearing as an error resulting in injustice.

      4. The seventh ground is referred to as the “economic downturn” issue – that Kearns P. erred in failing to regard the Taxing Master’s approach to the economic downturn as an error resulting in injustice within the meaning of s. 27 (3) of the Act of 1995.

7. The overall outcome of the finding on those grounds was that it was concluded that the Court of Appeal had no option but to remit the matter back to the Taxing Master for a renewed assessment of the appropriate instructions fee. It is stated in the judgment (at para. 188):
      “This should commence with a proper Bill of Costs being drawn up by the [plaintiff’s] solicitor’s cost accountants which sets out as fully as possible the time and labour expended by the solicitor in this case. Thereafter the Taxing Master should assess it in accordance with the methodology set out above.”
Accordingly, the appeal was allowed.

8. The defendant then applied to this Court for leave to appeal against the decision of the Court of Appeal pursuant to Article 34.5.3° of the Constitution. The plaintiff opposed the application for leave. By its determination dated 26th September, 2016 ([2016] I.E.S.C.D.E.T. 114), this Court determined that the defendant had raised issues of general public importance and that leave should be granted. However, it determined that the matter should be listed for an oral hearing to hear counsel’s submissions as to the specific issues to be heard on the appeal. Before considering the outcome of that hearing, it is useful to outline the statutory provisions and the provisions of the Rules which are of most relevance to that outcome.

Relevant statutory provisions/provisions of the Rules
9. Section 27 of the Act of 1995 conferred additional powers on the Taxing Master of the High Court. In the judgment of the Court of Appeal particular emphasis is attached to subs. (1) insofar as it applies to services rendered or provided by a solicitor. Insofar as is relevant, that sub-section provides:

      “On a taxation of costs as between party and party by a Taxing Master of the High Court, . . . the Taxing Master . . . shall have power on such taxation to examine the nature and extent of any work done, or services rendered or provided by . . . a solicitor, . . . and may tax, assess and determine the value of such work done or service rendered or provided in connection with the measurement, allowance or disallowance of any costs, charges, fees or expenses included in a bill of costs.”
In particular the words “to examine the nature and extent of any work done” are emphasised in the judgment of the Court of Appeal.

10. Sub-section (2) of s. 27 is also quoted in the judgment of the Court of Appeal. That sub-section provides:

      “On a taxation of costs as between party and party by a Taxing Master of the High Court, . . . the Taxing Master . . . shall have power on such taxation to allow in whole or in part, any costs, charges, fees or expenses included in a bill of costs in respect of . . . a solicitor . . . as the Taxing Master . . . considers in his or her discretion to be fair and reasonable in the circumstances of the case, and the Taxing Master shall have power in the exercise of that discretion to disallow any such costs, charges, fees or expenses in whole or in part.”
11. Sub-section (3) of s. 27 regulates the function of the High Court on a review of a decision of the Taxing Master. Sub-section (3) provides:
      “The High Court may review a decision of a Taxing Master of the High Court . . . made in the exercise of his or her powers under this section, to allow or disallow any costs, charges, fees or expenses provided only that the High Court is satisfied that the Taxing Master, . . . has erred as to the amount of the allowance or disallowance so that the decision of the Taxing Master . . . is unjust.”
12. Costs of and incidental to proceedings in the Superior Courts are governed by Order 99 of the Rules. Part IV of Order 99 deals specifically with the taxation of costs. Rule 37 sets out general regulations which apply to all taxations. It contains no less than thirty five sub-rules.

13. The essence of the Taxing Master’s function and, in broad terms, the parameters of his or her jurisdiction are set out in sub-rule (18) which provides:

      “On every taxation the Taxing Master shall allow all such costs, charges and expenses as shall appear to him to have been necessary or proper for the attainment of justice or for enforcing or defending the rights of any party, but, save as against the party who incurred the same, no costs shall be allowed which appear to the Taxing Master to have been incurred or increased through over-caution, negligence or mistake, or by payment of special fees to counsel or special charges or expenses to witnesses or other persons or by other unusual expenses.”
14. Of particular relevance for present purposes is that sub-rule (22)(ii) provides that, in exercising his or her discretion in relation to any item, obviously including the solicitor’s instructions fee, the Taxing Master –
      “. . . shall have regard to all relevant circumstances, and in particular to:

      (a) the complexity of the item or of the cause or matter in which it arises and the difficulty or novelty of the questions involved;

      (b) the skill, specialised knowledge and responsibility required of, and the time and labour expended by, the solicitor;

      (c) the number and importance of the documents (however brief) prepared or perused;

      (d) the place and circumstances in which the business involved is transacted;

      (e) the importance of the cause or matter to the client;

      (f) where money or property is involved, its amount or value;

      (g) any other fees and allowances payable to the solicitor in respect of other items in the same cause or matter but only where work done in relation to those items has reduced the work which would otherwise have been necessary in relation to the item in question.”

Under Order 99 of the Rules, the Taxing Master has a discretion in relation to the assessment of the general instructions fee.

15. Order 99 also deals with review of taxation in rule 38, which governs the carrying in of objections by the dissatisfied party before the Taxing Master and the reconsideration and review of his taxation by the Taxing Master sub-rules (1) and (2). The rule invoked by the plaintiff in initiating the application to the High Court in June 2014, rule 38(3), provides:

      “Any party who is dissatisfied with the decision of the Taxing Master as to any items which have been objected to as aforesaid or with the amount thereof, may . . . apply to the court for an order to review the taxation as to the same items and the Court may thereupon make such order as may seem just.”
The Court’s jurisdiction, of course, is now subject to s. 27(3) of the Act of 1995.

16. It will be necessary to refer to some other provisions of Order 99 which are referred to in the judgment of the Court of Appeal. However, it is more convenient to outline those provisions when outlining the relevant portions of the judgment of the Court of Appeal, or in the context of the analysis of the relevant submissions made by the parties.

Questions for hearing on this appeal
17. By further determination of this Court (Denham C.J., Dunne J. and Charleton J.) made on 11th November, 2016 and perfected on 14th November, 2016, the following questions were determined for the hearing of this appeal:

      “(1) To what extent, if any, may considerations as to the amount of time actually spent on a case be elevated above the relevant criteria mandated by Order 99, rule 37(22) for the fixing of costs?

      (2) If the amount of time spent is the central part of the analysis for the Taxing Master in assessing costs, should the Taxing Master allow a retrospective reconstruction of the time spent on a case and if so in what circumstances?

      (3) Is it within the discretion of the Taxing Master to disallow the costs of two solicitors in dealing with part of a case, and if so how may that discretion be reviewed by a court?

      (4) To what extent, if at all, are general economic conditions relevant to the instruction or brief fees, and if so relevant, how is that economic circumstance to be assessed?”


Liberty to appear as Amicus Curiae
18. On 17th November, 2016, the Chief Justice made two orders on foot of applications which had been made, one on behalf of the Incorporated Law Society of Ireland ("the Law Society") and the other on behalf of the Council of the Bar of Ireland ("the Bar Council"). Each was granted liberty to appear as amicus curiae in this appeal and each was at liberty to file written submissions in the matter. Written submissions were filed on behalf of the Law Society and on behalf of the Bar Council and each was represented by counsel on the hearing of this appeal.

Notable Feature of the Process
19. The duration of each of the hearings to date, at each level, has been set out earlier, with a view to demonstrating the importance which has been attached to the process at each level by the parties and by the adjudicators. Such importance is also manifest in the rulings and judgments which have emerged during the process. The Taxing Master produced, at both the taxation stage and the review stage, very detailed and comprehensive rulings. The concluding observations of Kearns P. on the review by the High Court, which have been quoted earlier (at para. 5), point to the thoroughness with which the parties pursued the review in the High Court, which is also reflected in the detailed and comprehensive judgment delivered by Kearns P. The judgment of the Court of Appeal, the relevant parts of which will now be outlined, also deals in detail and comprehensively with the issues on the appeal before it, and it is of particular assistance to this Court in its task on this appeal. The participation in the appeal of both the Law Society and the Bar Council also underlines the significance both professions attach to the questions which have been identified by this Court as being of general public importance. The input of both has been of considerable assistance to the Court.

Judgment of the Court of Appeal
20. It is convenient to outline the aspects of the judgment of the Court of Appeal relevant to the questions which arise on this appeal under the sub-headings which follow.

Bill of costs

21. In the judgment of the Court of Appeal, before dealing with the specific grounds of appeal, consideration is given to the bill of costs presented by the plaintiff’s solicitors which was the subject of the taxation before the Taxing Master and the subsequent review in the High Court and the Court of Appeal. In this context, rule 29(5) of Order 99, with emphasis attached to certain elements of it, is quoted in the judgment as follows:

      “Bills of costs are to be prepared with seven separate columns: –

        (a) the first or left hand column for dates;

        (b) the second for the numbers of the items;

        (c) the third for the particulars of the services charged for;

        (d) the fourth for disbursements;

        (e) the fifth for the Taxing Masters' deductions from disbursements;

        (f) the sixth for the professional charges;

        (g) the seventh for the Taxing Masters' deductions from professional charges.”

It is observed in the judgment (at para. 21) that it would appear that solicitors and legal costs accountants have lost sight of that rule, stating that, whilst bills of costs generally set out the date on which a professional service was given, they have, generally, failed to set out proper particulars of the professional services charged for and have failed to set out the professional fee for each individual service. It is then suggested (at para. 22) that clarity as to what “particulars” of the professional services should be set out in the bill of costs is to be derived from rule 37(22)(ii) of Order 99, which has been quoted earlier. In the judgment of the Court of Appeal (at para. 23) emphasis is attached to para. (b) of rule 37(22)(ii) and in particular to the words “the time and labour expended by” the solicitor. It is suggested, by reference to rule 29(5) of Order 99, that this must mean that, in setting out particulars of services charged for, there should be included the amount of time undertaken in respect of each such activity, the seniority of the solicitor carrying out such activity, and the professional charge for such activity, which "may include an hourly rate for such solicitor". Because of the specific reference to “time and labour”, it is further suggested (at para. 24) that it means that –
      “. . . a specific record of hours worked should be kept and set out in the Bill of Costs; secondly, the rule refers to the ‘skill, specialised knowledge and responsibility required of the solicitor’ which means that where there are solicitors of differing levels of seniority in a firm, these should be identified and their individual time and labour set out in the Bill of Costs; thirdly the fact that the Rules specify that the Bill of Costs must set out the number of ‘items’ being charged for and the professional charge for each, means that a Bill of Costs must contain the specific professional charge for each item; fourthly, in order to ensure that an appropriate professional charge is marked for the particular professional service, the hourly rate for each solicitor may be given to explain the professional charge.”
22. In the judgment, the bill of costs presented by the plaintiff’s solicitors is compared with what it is suggested is the requirement of the Rules for a proper bill of costs, and the conclusion is that it was not prepared in accordance with the Rules. The following criticisms are then advanced in relation to the bill of costs (at paras. 30 to 36):
      (a) that it was not drawn up in accordance with the Rules because, inter alia, the professional charge in respect of each item of professional services is not given at all;

      (b) that the requirement that “the particulars of the services charged for” in rule 29(5)(c) is not complied with because “it does not set out anywhere in any detail the amount of hours spent on any item or by whom the work was done”, or by whom it was done, whether by a partner or an assistant solicitor;

      (c) that it omits any reference to the hours spent on the case in the last few months of the case, even though detailed time-recording notes were kept by the plaintiff’s solicitors over this period;

      (d) that it is inordinately long and prolix and unnecessarily repetitious; and

      (e) that some of the items charged for appear to be lacking in reality.

Some examples are given of the items in the bill of costs the subject of the criticism at (e), which is the penultimate criticism, one being item 32, which is described in the bill of costs as “Marking one exhibit”, and which is charged at €0.27.

23. While, in general terms, I cannot but agree with that last criticism, I consider it is only proper to explain later the source and history of the particular item which has been exemplified, that is to say, item 32, to illustrate what the Rules require.

24. The final criticism in the judgment (at para. 37) levied at the bill of costs presented on behalf of the plaintiff is that the first mention of “any Instructions fee” is on page 98, where it is stated to be in the sum of €485,000. It is stated that this sum “emerges out of the blue” and that it does not appear to be based on anything which has gone before – apart from the amount of activities. This has given rise to the following comment:

      “One would have thought that a Bill of Costs would set out the date of the activity, the nature of the activity, the number of hours engaged on that activity and the charge for that activity. This would have resulted in a ‘running account’ of the Bill of Costs which would have resulted in a figure of €485,000 euros or whatever the figure might be. But in this case the figure simply emerges out of nowhere. It is difficult, if not impossible, to work out from the Bill of Costs how this figure was arrived at by the solicitor or cost accountant.”
It is then suggested (in para. 38) that it is hard to avoid the conclusion that the rolling up of all the items into a global instruction fee is to obfuscate, rather than clarify, the work which has been done and to justify an instruction fee by reference to the amount awarded to the client rather than the work done by the solicitor. For the reasons which will be outlined later, in my view, that is not a fair or reasonable inference to draw in relation to the format and content of the plaintiff's bill of costs.

Methodology of Taxing Master

25. Before going on to consider the methodology which had been adopted by the Taxing Master on taxation, the relevant legal principles are outlined in the judgment including the provisions of s. 27 of the Act of 1995 referred to earlier and the provisions of Order 99 referred to earlier. In addition, a number of authorities are referred to, including two recent authorities of the High Court to which reference will be made later. It is stated (at para. 55) that a major problem in the case is the methodology used by the Taxing Master and his approach to the assessment of the solicitors’ instructions fee. It is then stated (at para. 57) that the correct methodology to be followed by the Taxing Master in assessing bills of costs in taxation is as follows:

      “(1) Firstly, [at] the beginning of the process, he should ascertain from the Bill of Costs (or other records of the Solicitor) what work was done, who in the firm did it and what was their seniority, how long did the work take, how much is being charged for each individual professional service and what was the appropriate hourly rate for that solicitor.

      (2) Secondly, he should conduct a root and branch examination of the Bill of Costs and other papers in the case, consider the time and labour expended by the solicitor, and the skill, specialised knowledge and responsibility required of the solicitor in respect of each of the above items and assess whether the amount being charged for each professional service is fair and reasonable.

      (3) Thirdly, he should then assess the complexity of the cause or matter, the difficulty or novelty of the issues involved in the case and the other matters in O. 99 r. 37(22) and consider whether this requires an adjustment to the fee upward or downwards.”

26. To illustrate that the Taxing Master had used the wrong methodology, a passage from his first ruling is quoted in the judgment of the Court of Appeal (at para. 58). The Taxing Master stated at page 22 of his first ruling:
      “It is a Taxing Master’s obligation, in the first instance, to ascertain a full understanding of the nature and extent of a claimant’s solicitor’s work and then, and only then, having heard the submissions of the parties, attempt to put a value on the case. Having carried out this exercise, the resultant valuation should be tested against either, or both, the comparators which are relied upon by the parties and the extent of time necessarily expended by the solicitor in attaining justice on behalf of his client.”

      (Emphasis added in the judgment of the Court of Appeal).

What are described as the main errors of methodology illustrated by that passage are then set out in the judgment of the Court of Appeal (at paras. 60, 61 and 62). The first error identified is that, as the bill of costs did not contain any information about who in the plaintiff’s solicitors’ firm carried out the particular service, what was the seniority of the person, what was the person’s appropriate hourly rate, how long the work took and how much was being charged for that particular service, the Taxing Master should have directed the plaintiff’s legal costs accountants to prepare a fresh bill of costs and resubmit it. Secondly, it is stated that in refusing the offer of the plaintiff’s solicitors “to reconstruct the time spent on the file and to submit a memorandum of hours spent on the case to the Taxing Master”, and in directing the plaintiff’s solicitors not to do so, the Taxing Master committed a significant error as it meant that he did not have “any proper information about the time and labour spent on the case to consider the nature and extent of the work done”. On the hearing of this appeal, there was a considerable degree of uncertainty and, indeed, confusion as to what actually transpired before the Taxing Master in relation to the possibility of the plaintiff’s solicitors reconstructing the time spent, which will be addressed when question (2) is being considered.

27. The final error of methodology identified in the judgment of the Court of Appeal is expressed as follows (in para. 62):

      “Thirdly, instead of starting the assessment of the plaintiff solicitor’s work with an assessment of time and labour and then assessing whether the complexity and/or importance of the case required the fee to be adjusted upwards or downwards, the Taxing Master assessed the instruction fee primarily by reference to the complexity and nature of the case and only thereafter assessed a putative number of hours worked as a cross check on his assessment of an appropriate instruction fee. This is, in effect, putting the cart before the horse. The foundation stone of a proper assessment of a Bill of Costs is an assessment of the time and labour and charges of each solicitor for each professional service provided. The issues of complexity, novelty, importance of the case to the client and its value are only to be considered thereafter.”
Issue of “Time”

28. In addressing what is referred to as the “Time” issue there is a critical analysis in the judgment of the determination of the general instructions fee in the two rulings of the Taxing Master, some detail of which will be considered later. In general, the observations on both rulings reflect the earlier criticism of the methodology actually adopted by the Taxing Master, and the consequences of his failure to adopt what had previously been outlined as the correct approach. The approach adopted is perceived as resulting in a subjective evaluation of the solicitor’s instructions fee. It is stated (at para. 94):

      “This results in a sterile debate based on the subjective assessment of either the Taxing Master or the plaintiff’s solicitors as to what is an appropriate instruction fee. Such a subjective assessment needs to be replaced by a more objective analysis of the various factors in play which result in a particular instruction fee. That is why any assessment of a solicitor’s instruction fee must start with the hours worked on each item, the level of seniority of the solicitor involved and the professional charge for that individual activity (which may include the hourly charge). This allows the parties – and indeed the court – a measure of objectivity in the assessment because professional charges for specific items (including hourly charges) are transparent and can be assessed with some objectivity and can be compared with other hourly rates. The debate will then be about whether the hourly rate was reasonable in all the circumstances and/or whether the number of hours spent was reasonable and/or the level of seniority of the solicitor involved. There may also be an assessment as to whether fees should be adjusted upwards or downwards because of the other matters set out in Order 99 rule 37(22). That is the proper battleground for a taxation of costs rather than whether, when taken in the round, an appropriate instruction fee should be €265,000 or €485,000.”
29. In the context of addressing the judgment of the High Court, it is stated in the Court of Appeal judgment (at para. 96) that, whilst it is the case that the plaintiff’s solicitors did not keep records from September 2008 until July/August 2011, nevertheless they did offer to reconstruct the hours worked on each item and to provide a memorandum of these hours to the Taxing Master, but the Taxing Master refused this offer, which meant that he did not have the proper information to properly assess the time and labour spent by the solicitors on each item of the professional service which they provided. There follows (at para. 97) a quotation from the judgment of Kearns P. on the review in the High Court, which I consider it appropriate to put in context by reference to that judgment.

30. Kearns P., in his judgment, did note that the Taxing Master did not require the solicitors to prepare retrospective schedules, but he stated that, nonetheless, the Taxing Master did examine and explore the amount of hours actually expended, referring, in particular, to the second ruling of the Taxing Master following the bringing in of the objections. In fact, in addressing the question whether the Taxing Master gave sufficient regard to the amount of time involved, Kearns P. stated (at p. 24) that the Taxing Master expressly stated on numerous occasions in his rulings that time was only one of the factors to be considered and that his approach would be informed by his consideration of the nature and extent of the work, the submissions made on taxation and the working papers and documentation submitted. Kearns P. went on to state, in a passage quoted in the judgment of the Court of Appeal (at para. 97), as follows:

      “In this respect, the Court accepts the defendant's contention that the Taxing Master did in fact test and cross-check his assessment against the time records and time estimates made available to him. This seems an eminently suitable approach to have adopted in circumstances where the time records adduced were not accurate and the majority of time expended went unrecorded. Rather than engage in a full recital of the Taxing Master's reasoning, the Court has appended the relevant pages of the Taxing Master's second ruling on this issue at the end of this judgment. I agree with the approach adopted by the Taxing Master as therein detailed, which has due regard to all of the relevant criteria.”
In fact, the appendix to the judgment of the High Court contains the section of the second ruling on the assessment of the instructions fee (from p. 63 to p. 75). In the judgment of the Court of Appeal (at para. 98) it is questioned how the Taxing Master could have tested and cross-checked his assessment of the instructions fee against the time records and time estimates made available to him in circumstances where the time records and time estimates made available to him were manifestly deficient and, it is stated, were accepted by the plaintiff’s solicitors as being deficient. It is stated that the problem could have been rectified by the Taxing Master directing the plaintiff’s solicitors to furnish to him a reconstruction of their estimate of the hours worked on the case from September 2008 to August 2011.

31. It is observed in the judgment of the Court of Appeal (at para. 99) that the plaintiff’s solicitors had, in the course of the taxation process, revised the hours spent on the case upwards from l,000 hours to 1,200 hours, which Kearns P. had characterised as “an unhelpful estimate”, which is considered to be a fair criticism. This is just one of the many criticisms which the court made earlier in the judgment in relation to the estimates of time spent put forward by the plaintiff to the Taxing Master, as the Court of Appeal attributed the Taxing Master’s failure to properly assess the amount of time and labour spent to its finding that the bill of costs presented by the plaintiff was not in the correct format, which is at the core of the remittal by the Court of Appeal of the matter to the Taxing Master for a reviewed assessment of costs, I have not considered it necessary to outline or comment on those criticisms. This further criticism is mentioned because the position of the plaintiff is that the transcript of the review hearing before the Taxing Master proves that the plaintiff adhered to the 1,000 hour estimate on the review. In any event, once again, it is reiterated (at para. 99) that it is the obligation of each solicitor presenting a bill for taxation on a party and party basis to comply with the Rules and to furnish a bill of costs “which sets out the time and labour spent on the case and on each element of the case”. It is also stated that there is an obligation on the solicitors to keep a proper record of their time and labour spent on each case and, in the event of failure to keep proper records of time and labour, there is no reason why they should get the benefit of any doubt about the estimate of hours spent on the case. A bill with only an estimate of hours and no proper records to back up that estimate should be carefully scrutinised by the Taxing Master, it is suggested.

32. In concluding on the “Time” issue, it is stated (at para. 101) that “the Taxing Master and Kearns P. did not give sufficient regard to the amount of time involved”, which was an error of principle and of law, which resulted in an injustice within the meaning of s. 27(3) of the Act of 1995.

Issue of intangibles

33. The second ground of appeal, referred to in the judgment as the issue of “intangibles”, is then considered. What are referred to as the “intangibles” are the matters (apart from time and labour expended), outlined at (a) and (b) in rule 37(2)(ii) of Order 99, which the Taxing Master is mandated to have regard to: complexity; difficulty or novelty; skill; specialised knowledge; and responsibility. In relation to novelty and complexity, the decision of the Court of Appeal (at para. 115) is that neither the Taxing Master nor Kearns P. made any error or any error which amounts to an injustice to the plaintiff’s solicitors within the meaning of s. 27(3) of the Act of 1995. In relation to matters of skill, knowledge and responsibility, it is implicit in the judgment that it was accepted that there was not a failure on the part of either the Taxing Master or Kearns P. to have regard to those matters. A passage from the judgment of Kearns P. is quoted in the judgment of the Court of Appeal (at para. 125) in which it is stated that, where hourly rates are fixed for professional fees, it must be assumed that the matters referred to are reflected in the rate arrived at. Kearns P. stated that, even if he was mistaken on that, he was nonetheless satisfied that the Taxing Master did have regard to the matters which were factored into his consideration and he saw no reason to interfere with his findings on this ground.

34. However, once again, it is pointed out in the judgment of the Court of Appeal (at para. 126) that the methodology used by the Taxing Master was wrong in law. Once again the following is stated:

      “He ought to have first considered the time and labour expended by the solicitors and in so doing to have assessed the number of hours spent, the seniority of the solicitor involved, the hourly rate for each solicitor and the appropriate professional charge for each element of a professional service. If he had done so he would then have been able to build an instruction fee from the ground up. It is only after this exercise has been undertaken that the Taxing Master should consider other issues such as complexity, novelty, skill, specialised knowledge and responsibility. Moreover if the hourly rate is correctly set then these matters should be incorporated in, and reflected in, an hourly rate. The Taxing Master in this case did not follow that approach. He took intangibles into account at the very start of his analysis instead of at the end. That is of course an error in methodology.”
Senior solicitors issue

35. Moving on to the fourth ground of appeal before the Court of Appeal, which is referred to as the two “senior solicitors” issue, the arguments advanced before the Taxing Master, both on taxation and on the objections hearing, are outlined, as are the conclusions of the Taxing Master both at the taxation stage and at the later review stage following the hearing of the objections. It is recorded (at para. 142) that evidence was given on the hearing of the objections by the plaintiff’s mother, the two solicitors from the plaintiff’s solicitors’ firm who were present for the hearing in the High Court in October, 2011, and senior counsel who appeared on behalf of the plaintiff at that hearing, and that all of the witnesses confirmed that, in their view, the presence of two senior solicitors was necessary for the proper running of the case and the proper conduct of the negotiations between the parties. The position of the Taxing Master at the review stage was that, in assessing costs on a party and party basis, it was not necessary or appropriate to include the costs of two senior solicitors in the taxation of costs, although he did indicate that he would include a senior solicitor and a more junior solicitor. The Court of Appeal, accordingly, identifies the issue in dispute between the parties as the difference in costs between one junior solicitor and a senior solicitor in court for the duration of the hearing over 6 days. It is then noted that, in the High Court, Kearns P. came to the conclusion that the Taxing Master was correct in reaching that conclusion. The conclusion reached in the Court of Appeal by reference to the requirements of rule 37(18) of Order 99, which has been quoted earlier, is that there was a requirement for two senior solicitors to be present for the reasons outlined in the judgment (at para. 148). Accordingly, it is concluded that there was an error on the part of the Taxing Master which amounted to an injustice within the meaning of s. 27(3) of the Act of 1995.

“Economic downturn” issue

36. The seventh ground of appeal, which is addressed by the Court of Appeal, is referred to as the “economic downturn” issue. As recorded in the judgment (at para. 185), this ground arose from the plaintiff’s submission that the Taxing Master and Kearns P., on the review in the High Court, had “both relied heavily upon the economic downturn as a basis for rejecting comparators and for upholding the instructions fee in this case”, although there was no real evidence before either the Taxing Master or the High Court on those issues. As regards a further submission made on behalf of the plaintiff that a policy of simply reducing the level of costs previously allowed was not a substitute for a root and branch examination of the type required to be undertaken by the Taxing Master under s. 27(1) of the Act of 1995. The Court of Appeal expresses agreement with that submission, and it is then stated (at para. 186):

      “The Taxing Master must undertake a full assessment of the nature and extent of the work undertaken by the solicitor as set out above. This will, or should, result in professional charges which are in line with the rates charged for these services during the economic downturn. The issue of the economic downturn in other words should be reflected, where appropriate, in the specific charges for each professional service undertaken at the relevant time rather than at the level of a global instruction fee. There is no specific provision in the Rules for an adjustment up or down depending on economic circumstances. Instead this should be reflected in the assessment of the professional charge made by a solicitor under a particular service at a particular time.”
The finding of the Court of Appeal is that, insofar as the Taxing Master assessed an overall instruction fee and then reduced it because of the economic downturn, he made an error of principle. It is stated that “such an approach fails (sic) to apply the correct methodology”, although the extent to which that may have occurred is not identified. That leaves a level of uncertainty as to whether there was a finding that the Taxing Master, in fact, erred. It is also stated that the Taxing Master was entitled to take economic circumstances into account, but that he should take it into account at all levels of his assessment of the fee, i.e. assessing an hourly rate, the charge for a specified professional service and his final assessment of the instructions fee as a whole.

Conclusion

37. As has been recorded earlier (at para. 7) the Court of Appeal concluded that the matter should be remitted to the Taxing Master for a renewed assessment of the appropriate instructions fee, to be assessed in accordance with the methodology which is set out in the judgment.

38. The two recent authorities of the High Court, referred to in the judgment of the Court of Appeal, will now be considered.

Recent High Court authorities referred to in Court of Appeal judgment
39. The earlier of the two recent authorities of the High Court which is referred to in the Court of Appeal judgment is the judgment of Herbert J. delivered on 23rd July, 2008 in C.D. v. The Minister for Health [2008] I.E.H.C. 299 ("the C.D. case"). That case concerned a review of the taxation of what is referred to as the “General Instructions Fee”, that is to say, the solicitor’s instructions fee. In the passage from the judgment, which is quoted with approval in the judgment of the Court of Appeal (at para. 48), Herbert J. stated (at p. 32):

      "The learned Taxing Master should have objectively examined each of the separate items in the Bill of Costs which together make up the claim for a General Instructions Fee. He should have ascertained precisely what work was done by the Solicitor's for the Costs, with particular reference to the documentation furnished in support, and by what level of fee-earner it was done. The learned Taxing Master should next have considered whether it involved the exercise of some special skill on the part of the doer and indicated what he considered that skill was and why he considered its use was necessary in the circumstances. The learned Taxing Master should have indicated what amount of time he considered should reasonably have been devoted to this work employing as much precision as the nature of the work and the information available to him would permit. The learned Taxing Master should have considered whether the doer of the work bore any special responsibility in the course of carrying out that work and identified what he considered that to be and how it arose. The learned Taxing Master should have considered the extent to which the work was proper and necessary for the attainment of justice so as to be allowable on a Party and Party taxation. In my judgment, this is the form of scrutinisation, measurement and evaluation which it is necessary for a Taxing Master to perform in the proper discharge of his or her statutory powers under the provisions of s. 27(2) of [the Act of 1995]. Without such an analysis, his discretion to allow in whole or in part as fair and reasonable or, to disallow, any item in the General Instructions Fee would not be validly exercised."
There immediately followed the passage from the judgment of Herbert J. just quoted, the following observations (at p. 33):
      "In my judgment it is neither necessary nor desirable and, indeed in the absence of a time costing system, it would usually be impossible for the Taxing Master to value individual items making up a claim to a General Instructions Fee."
Strangely, those observations are not adverted to at all in the judgment of the Court of Appeal.

40. In the later authority, Cafolla v. Kilkenny & Ors. [2010] I.E.H.C. 24 ("the Cafolla case"), in which judgment was delivered on 5th February, 2010, Ryan J. referred to the judgment of Herbert J. in the C.D. case as containing the most detailed prescription of the obligations of the Taxing Master. However, he did not quote the passage from the judgment of Herbert J. quoted above, or indeed any passage from the judgment. Rather, he paraphrased what Herbert J. said.

41. In a passage in his judgment in the Cafolla case, which is quoted in the judgment of the Court of Appeal (at para. 54), having quoted s. 27 of the Act of 1995, Ryan J. stated (at p. 5):

      "The section prescribes a new approach for the Taxing Master in assessing costs. Whereas previously the main focus in a taxation was on comparisons with other cases, particularly when it came to major items such as instructions’ and brief fees, s. 27(1) and (2) of the Act now focus on the work that was done in a case by solicitors, barristers and expert witnesses and mandate the Taxing Master to examine the nature and extent of their work in order to evaluate the claims in the bill of costs. The section has been examined in a series of cases and the law can be considered to be settled in this area. The consensus is that the Master must assess the nature and extent of the work which is the subject of the item of claim in the bill of costs. This applies to the work of a solicitor giving rise to his claim for his instructions fee and also the work of counsel."
In the Cafolla case the taxation of the plaintiff’s solicitor’s instructions fee was one of the items under review in the High Court. Ryan J. found (at p. 22) that the Taxing Master had failed to ascertain the nature and extent of the work done by the claiming solicitors (i.e. the plaintiffs' solicitors), he had failed to evaluate that work as required by s. 27 of the Act of 1995 and he had failed to ascertain the time spent on the work, as he was required to do by rule 37(22)(ii) of Order 99. Having made it clear that he considered that he should follow the approach adopted by Herbert J. in the C.D. case, Ryan J. stated that the approach taken by the Taxing Master in the Cafolla case was inconsistent, not only with the judgment of Herbert J., but with other cases. Ryan J. remitted the matter and directed that a fresh taxation be conducted by a different Taxing Master.

42. In general, nothing in the passage from the judgment in the Cafolla case quoted in the next preceding paragraph is at variance with the judgment of Herbert J. in the C.D. case. However, there are aspects of the judgment in the Cafolla case which appear to go beyond what Herbert J. found in his judgment in the C.D. case the Taxing Mater is mandated by law to do. The passage from the judgment of Ryan J. in the Cafolla case, which is first quoted in the Court of Appeal judgment (at para. 49), with the implicit approval of the Court of Appeal, illustrates this. In that passage, Ryan J. stated (at p. 9):

      “Adopting the approach prescribed by Herbert J. will obviously require an analysis of the time records of the solicitor making the claim for costs. It may be that a solicitor will not carry such records, although I would have thought that those solicitors would be few in the present world and becoming fewer as time goes on. But, assuming that there are no time records, it should nevertheless be possible for the work to be detailed and for the time spent to be estimated or calculated and to the extent that there is difficulty in calculating the time spent, that is a problem for the claimant solicitor because there is a clear obligation under the Rules to have regard to that element.
What this comes down to, as I see it, is that the Taxing Master is asked to inquire of the solicitors claiming the costs, what work they did, who in the firm did it, how much is charged for it or what was the appropriate rate and how long the work took. Asking what a person did and how long it took are the most elementary inquiries in evaluating work. This is not, of course, to say that getting the answers to these questions is the end of the process, but it does indeed seem to be the beginning of the exercise that is required to be done by the Taxing Master under the section and the Rules.”

Interestingly, in the judgment of the Court of Appeal emphasis is added to most of the first paragraph, and all of the second paragraph, in that passage.

43. The requirement suggested by Ryan J. that there be “an analysis of the time records of the solicitor making the claim for costs” is not stipulated in the passage from the judgment of Herbert J. quoted earlier. Herbert J. merely referred to “the documentation furnished in support”, without identifying those documents. Having said that, Ryan J. recognised that, in the absence of time records, the work could be detailed and the time spent could be estimated. A significant departure from the approach advocated by Herbert J. is to be found in the second paragraph, where it is suggested that “the beginning of the exercise” which the Taxing Master is required to conduct, in addition to asking what work was done and who did it, which is the first requirement identified by Herbert J., also involved the Taxing Master enquiring how much is charged for the work, or what was the appropriate rate, and how long it took. What it has been stipulated that the Taxing Master must do in the second paragraph of that passage is at variance with the approach advocated by Herbert J., particularly in giving primacy to the time factor. That is reflected in what the Court of Appeal laid down as the first step in the correct methodology to be followed by the Taxing Master, as set out in its judgment (at para. 57), which has been quoted earlier. That first step appears to be based on the approach suggested by Ryan J., rather than the approach suggested by Herbert J., in that Herbert J., while putting the ascertainment of the work done by the solicitor at the beginning of the process, did not identify time as being important at that first stage. A crucial question which that raises in the context of the issues which this Court has to determine on this appeal is whether the approach advocated by Herbert J. conforms with what is laid down in the Act of 1995, and in Order 99 of the Rules.

44. What an analysis of the passage from the judgment of Herbert J. in the C.D. case quoted earlier discloses, in my view, is that what it stipulates the Taxing Master should have done in that case and, presumably, what the Taxing Master should invariably do in conducting taxation of a solicitor’s instructions fee, is wholly informed by the requirements of s. 27 of the Act of 1995 and rule 37(22)(ii) of Order 99, which is the correct approach. Applying the provisions of s. 27, in order to exercise his discretion in a manner that is fair and reasonable in, say, disallowing part of an instructions fee, the Taxing Master must exercise the power conferred on him to examine the nature and extent of the work done by the solicitor in respect of which the instructions fee is claimed and to assess and determine the value of the work as provided for under s. 27(1). In the case of the instructions fee, as Herbert J. correctly stated, he or she should examine the separate items in the bill of costs which make up the instructions fee item, which, as Appendix W of the Rules envisages is an “omnibus” fee, as the defendant suggests. Obviously, in order to determine the value of the work done in respect of the various elements of the instructions fee, the Taxing Master should ascertain precisely the work done and by whom, and at what level, it was done. The foregoing matters clearly go to the proper application of s. 27(1) and (2). The remainder of the matters outlined by Herbert J. reflect the matters which the Taxing Master is required to have regard to under rule 37(22)(ii). I consider that it is correct, as Herbert J. stated, that, without the type of analysis which he outlined should be carried out, the Taxing Master, in disallowing part of the instructions fee would not be validly exercising the jurisdiction conferred by s. 27 and Order 99, and that the approach he stipulated the Taxing Master should adopt accords with s.27 and Order 99. Whether the different approach suggested by Ryan J., and incorporated by the Court of Appeal in its judgment as the first step in what it found to be the correct methodology to be employed by the Taxing Master, is in accordance with the Act of 1995, and Order 99 of the Rules, will be considered when addressing question (1). The Court of Appeal, in its criticism of the bill of costs in this case and in its criticism of the methodology employed by the Taxing Master on the taxation and in ruling on the steps the Taxing Master should have taken, went much further than Herbert J. in identifying the obligations of the Taxing Master in assessing the general instructions fee.

45. Accordingly, before the questions raised on this appeal can be addressed, it is necessary to consider -

      (a) whether in relation to the bill of costs, the requirements of Order 99 were complied with by the plaintiff, and

      (b) the methodology which was actually employed by the Taxing Master.


Bill of costs: requirements of Order 99 met?
46. Although the criticism in the Court of Appeal judgment of items, such as item 32, in the bill of costs as lacking reality is the least significant of the criticisms made of the format and contents of the bill of costs, it is a useful starting point in determining whether the requirements of Order 99 were complied with by the plaintiff. The source and history of an item, such as item 32, in the bill of costs, is enlightening. Rule 12(1) of Order 99 provides that the scale of costs outlined in, inter alia, Part I of Appendix W, together with the notes and general provisions contained therein, shall apply to the taxation of all costs incurred in relation to contentious business. Item 60 in Part I relates to “[p]reparation for marking by commissioner for oaths of exhibit to affidavit for each exhibit” and it is obviously the item which corresponds to item 32 in the plaintiff’s bill of costs. When the current Rules came into operation on 1st October, 1986, the figure which appeared opposite item 60 was £0.20. Appendix W was amended by the substitution of euro equivalents by the Rules of the Superior Courts (No. 4) (Euro Changeover) 2001 (S.I. 585/2001) and the figure substituted for item 60 was €0.25 (per Ó Floinn on Practice & Procedure in the Superior Courts, 2nd Ed. (Dublin, 2008). While I cannot explain the 2 cents difference between item 32 in the bill of costs and item 60 in Appendix W, I am satisfied that, in drawing up the bill of costs on behalf of the plaintiff, the legal costs accountants were, in relation to the items costed in Appendix W, merely complying with Order 99. The undoubted lack of reality in relation to the figures for items such as item 60 in Part I of Appendix W is compounded by the fact that the Rules which came into operation in 1986 replaced the Rules of the Superior Courts, 1962 (S.I. No. 72 of 1962) but, as counsel for the defendant pointed out, the scale of costs outlined in Appendix W was not updated, although it is obvious that in 1986 account was taken in Appendix W of decimalisation, which came into effect on 15th February, 1971, and, presumably, also of the fact that, by 1986, the link with the pound sterling had broken, as happened on 13th March, 1979, the State having opted to join the European Exchange Rate Mechanism in 1979. To complete the picture, although, in reality, it is of no relevance, the figure which appeared opposite item 60 in the 1962 Rules under the heading “Ls.d.” is “0 3 0”, in other words three shillings.

47. That things have not changed over the past fifty five years since 1962, means that the vast majority of the costs set out in Part I of Appendix W in relation to the eighty one costed items listed there are less than €2. It is hardly surprising that, on the hearing of the appeal, counsel for the defendant referred the Court to a passage from the judgment of Murphy J. in Smyth v. Tunney [1991] 1 I.R. 451 on the meaning of "Solicitor's General Instruction Fee", which was quoted by Herbert J. in the C.D. case (at p. 26). In particular counsel suggested that the last sentence in that passage is helpful. To put it in perspective, it is necessary to quote the last two sentences. There Murphy J. stated (at p. 469):

      "Mr. William Brennan, the costs drawer who gave evidence on behalf of the defendants, explained that the instruction fee was frequently referred to as 'the great equaliser'. It was the means by which solicitors were compensated for the minimal nature of the fees allowed on the itemised basis."
That passage certainly confirms the lack of reality which was the subject of justified criticism by the Court of Appeal. However, other than prompting an observation that an amendment of Order 99 and, in particular, of Appendix W is long overdue, the criticism of the costed items in the bill of costs, which comply with the costs in Appendix W, does not justify the conclusion that the bill of costs was not prepared in accordance with the Rules.

48. Overall, I consider that the criticisms in the judgment of the Court of Appeal of the bill of costs are misconceived, in particular, the finding that the treatment of the solicitor's instructions fee in the bill of costs does not comply with the requirements of Order 99.

Referring back to the statement in the judgment (at para. 38) quoted earlier, which suggests that the rolling up of all items in a global instruction fee is to obfuscate, rather than to clarify the work which has been done, and to the view I have expressed that I do not think that that is a fair and reasonable inference to draw in relation to the plaintiff's bill of costs, it is necessary to consider the format and content of the part of the bill of costs dealing with the general instructions fee, which is before this Court, in some detail. The “general instructions fee”, that is to say, the plaintiff’s solicitors’ instructions fee, is item 165 at page 20 in the bill of costs. That item is stated to include what follows over the next seventy seven pages to page 97, commencing with “[t]aking initial instructions”, the first twenty four pages dealing primarily with the nature of the plaintiff's claim against the defendant, and ending with the hearing in the High Court for the ruling made on 26th October, 2011. It is true that what appears between page 44 and page 97 is narrative, which describes the work undertaken by the plaintiff's solicitors from the taking of initial instructions, but in respect of no element of which is any fee or charge ascribed. At the end of the narrative it is stated (on page 97):

            “This general instructions fee reflects the

            work done under the headings above and

            account of, inter alia;

            The novelty, rarity, complexity and difficulty of the

            matter

            The issues on liability and causation

            Qualified time actually spent

            Responsibility borne

            Skill and specialised knowledge brought to

            bear

            Number of days at Hearing

            The amount of the interim settlement and

            equivalent lump sum award

            Taking all relevant matters into

            consideration there is proposed a General

            Instructions Fee of €485,000.00

49. In comparing the manner in which the general instructions fee is dealt with in the bill of costs with Appendix W, the corresponding item is item 16 in Part I of Appendix W, being described as –
      “Instructions for trial or hearing of any cause or matter, petition or motion, whatever the mode of trial or hearing . . .”.
No figure appears opposite item 16; rather the word "Discretionary" appears in the right hand column. Rule 37(22)(i) of Order 99 explains the relevance of "discretionary" and provides that when in Appendix W there is entered the word “discretionary” –
      “the amount of costs to be allowed in respect of that item shall, subject to any order of the Court be in the discretion of the Taxing Master within the limits of the sums to be so entered (if any).”
Moreover, as provided for in Rule 12(1) of Order 99, in Appendix W there immediately follow explanatory notes in relation to item 16 and item 17 ("instructions for appeal"). The notes state that those items “are intended to cover work necessarily or properly done in preparing for trial, hearing or appeal”. The notes also set out what is obviously a non-exhaustive list of the type of work included, for example: taking instructions to sue; considering the facts and the law; interviewing witnesses; arranging to obtain expert reports; perusing pleadings and other relevant documents; negotiations; and “the general care and conduct of the proceedings”. It is quite clear that, in the drawing up of item 165 of the bill of costs, regard was had to those notes.

50. On any reading of item 16 in conjunction with the notes and in the context of Rule 12(1) and Rule 37(22)(i), one must conclude, as counsel for the defendant suggests, that the Rules envisage the general instructions fee being an omnibus figure. In particular, the Rules do not envisage a specific professional charge in respect of each item of professional services within the general instructions fee, or the hourly rate for each solicitor by whom the work is done, being specified in the bill of costs. It is worth recalling the passage in the judgment of Herbert J. in the C.D. case quoted earlier, which makes it clear that the Taxing Master is not required to value individual items making up the general instructions fee. It is beyond question that item 165 in the bill of costs in this case was constructed having regard to the template provided for in Appendix W and that the requirements of Order 99 were complied with. Accordingly, I am satisfied that the Taxing Master did not err in failing to direct the plaintiff's legal costs accountant to prepare a fresh bill of costs and resubmit it. Finally, it is noted that this Court was informed that the format of the bill of costs presented by the plaintiff’s solicitors was not the subject of controversy either before the Taxing Master or in the High Court.

Methodology employed by Taxing Master in assessing the general instructions fee
51. As the review by the Taxing Master under rule 38 followed on from his first ruling on the taxation which led to the objections brought in by the plaintiff, it is necessary to consider how the assessment of the instructions fee was dealt with in the first ruling. In the bill of costs the plaintiff had claimed the sum of €485,000 in respect of the general instructions fee. It is clear that, in addition to the bill of costs, the Taxing Master had time records in respect of the period from August 2011 to 26th October 2011, the date on which the order of the High Court ruling on the settlement was made. The Taxing Master also had what was referred to in the course of the proceedings as "the Keyhouse document", which contained a list of the activities in relation to the proceedings from September 2008 to and beyond the date on which the order of the High Court was made, namely, 26th October, 2011. By 26th October, 2011, 1,463 activities had been listed in this document. In the plaintiff's written submissions to the Taxing Master on the objections, it was stated (at p. 20) that it had been explicitly explained to the Taxing Master and to the defendant that the so-called Keyhouse document was a "computer generated report" on certain activity only. It was further stated:

      "It is automatically generated every time a letter, e-mail or scan is prepared on the computer system. It is not a time recording system, nor does it record perusals, attendances, consultations or documents received."

      (Emphasis in original).

52. What the first ruling disclosed in relation to the position of the plaintiff, who was represented by Mr. T. McMahon ("Mr. McMahon"), of Anthony E. McMahon, Legal Cost Accountants, was that it was estimated that 1,000 hours had been spent in pursuance of the plaintiff’s action, which included the hours recorded in respect of the period from August 2011 to October 2011. The time period in relation to that latter period was characterised as recorded time, whereas the time in respect of the earlier period was characterised as estimated time. It appears that the plaintiff’s position was that a rate of €375 per hour would be reasonable. In this context, the Taxing Master stated in the first ruling (at page 33) that it must be highly questionable whether the full hourly rate of €375 could be applied to all work undertaken in the matter.

53. As recorded in the first ruling, the position adopted on behalf of the defendant, who was represented by Mr. T. McEvoy ("Mr. McEvoy"), of Cyril O’Neill, Legal Costs Accountants, was that the time element (at €375 per hour) should not be allowed. It was suggested on behalf of the defendant that the fee should be considered against the nature and extent of the work when considered on a year on year basis, which resulted in the defendant submitting that the following breakdown of the fee would be reasonable:

        • 2008: September onwards €5,000

        • 2009: €20,000

        • 2010: €30,000

        • 2011: to date of settlement: €150,000

In relation to each of those periods, there is some narrative in the first ruling in relation to the work done by the plaintiff's solicitors in relation to the proceedings. To take the year 2009 as an example, the following matters are referenced: there were 130 activities during that period, which I assume were identified by reference to the content of the "Keyhouse" document, which the Taxing Master was given on the first day of the taxation hearing; medical records were sourced; eight expert witnesses, who were named, were retained; pleadings were at an early stage, but the work included consideration of the draft Personal Injuries Summons submitted by counsel; the summons was issued in November 2009; and an appearance was received. Having outlined the foregoing, it was stated that it had been suggested on behalf of the defendant that the value for the period be €20,000. In addition, in respect of the last period, 2011, it was stated that it had been suggested by Mr. McEvoy that a separate allowance should be made for preparation for trial, attendance thereat and negotiations for settlement and the figure of €25,000 was suggested in respect of the preparation and €10,000 for the court attendance, but on the basis of allowance for one solicitor’s attendance only. The result was that the total valuation put forward on behalf of the defendant of the instructions fee was put at €240,000, with, as the Taxing Master recorded, a suggestion that the figure might reasonably be increased to €250,000.

54. In fact, what the Taxing Master did on the taxation of the general instructions fee was to adopt the approach advanced on behalf of the defendant, stating in the first ruling (at p. 39):

      “Mr. McEvoy provided me with a description of the manner in which he addressed the assessment of the instructions fee herein. In essence he broke the fee down into various components, based upon work which he identified as having been carried out during each of the years commencing in September 2008 up to October 2011.
In my view this is an appropriate way to carry out an assessment of the work as it provides an opportunity to consider clearly identifiable work broken down into segments to which appropriate sums representing what are asserted to represent reasonable fees, are assigned. I have already outlined in full the basis upon which Mr. McEvoy arrived at his valuation for the instructions fee at a maximum of €250,000."

Earlier, the Taxing Master recorded (at p. 13) that Mr. McEvoy "expressed himself happy that the time diary report which contains descriptions of activities as they occurred, appeared accurate". The so-called Keyhouse document was headed "Time/Diary Report" and obviously is the document relied on by Mr. McEvoy in respect of the period prior to August 2011, after which the plaintiff's solicitors' time records were available.

55. However, on the taxation two adjustments were made by the Taxing Master to the figures presented on behalf of the defendant in the first ruling, namely:

      (a) in relation to the year 2011 he increased the figure from €150,000 to €175,000; and

      (b) as regards the additional figure of €25,000 in respect of preparation, he increased that figure to €30,000.

The Taxing Master expressed the view in the first ruling (at p. 40) that those figures, which measured the instructions fee at €270,000, took into account the value of the case and all intangible factors. In the Appendix attached to this judgment there is a copy of a table (the Table) which was included in the plaintiff’s submissions, dated 13th February, 2013, to the Taxing Master, prior to the objections hearing. The two columns on the right of the Table are represented as showing the breakdown of the defendant’s proposal for the amount of, and the Taxing Master’s allowance for, the general instructions fee, but a caveat must be issued in relation to the allowance, because of the explanation given by the Taxing Master in the second ruling in relation to the allowance for the 2011 period, which will be outlined later. The left-hand column, which is headed “Plaintiff’s Suggested Fee”, shows the plaintiff’s suggested breakdown of the general instructions fee for the purposes of the hearing of the objections by the Taxing Master. In relation to that column, it is stated in the submissions:
      “Because Time Records are available from the point of Briefing Counsel in August, 2011, the figures mentioned herein are based on the hours spent (@ €375 per hour, for illustration)”
Notwithstanding the Taxing Master’s quibbles, which were justified, the Table is helpful in demonstrating what happened at taxation.

56. In the second ruling, following the bringing in and hearing of the objections, the Taxing Master adopted an approach similar to that which he had adopted on the taxation, which he explained as follows in the second ruling (at p. 20):

      "Ultimately I decided that the fee must be assessed on the basis of the matters referred to in the relevant Statutory Provisions: s. 27 of [the Act of 1995] and Order 99, Rule 37(22)(ii) . . . Of course, time spent is an important factor to be considered. But it is but one factor. It would, in my view, be wholly wrong, for the purpose of assessing a Solicitor's Instructions Fee to ascribe a hourly rate or number of rates to specified hours. This can only be used as a test . . . To apply such methodology in the circumstances of the instant case would be to ignore all the other factors which it is statutorily mandated to apply and accordingly this is impermissible. Neither has the Taxing Master any role to play in fixing Solicitors' hourly rates or in deciding which hourly rate should be applied."
He further rationalised adopting that approach in the second ruling (at p. 64) as follows:
      “In my view a confused and unreliable assessment, based on time expended, has been presented on behalf of the Plaintiff and I am satisfied that the manner in which I assessed the fee, based on the nature and extent of the work, with time being but one of the factors taken into account was the correct and only way to arrive at a just allowance as between party and party. The relevant Statutory provisions are not permissive of any other methodology.”
The Taxing Master did, however, make one adjustment to the figures in the first ruling. As was recorded in the second ruling (at p. 75), he increased the court attendance allowance, which originally had been €10,000, by €6,000 to €16,000, “to take into account the attendance of a senior Solicitor and the notional attendance of an Assistant Solicitor at court on all the days in question”. The outcome was that the general instructions fee was increased to €276,000.

57. Over the twelve pages of the ruling attached as an appendix to the judgment of the High Court, the Taxing Master explained his reasons for not making any other adjustments, and, in particular, for rejecting the various assessments put forward on behalf of the plaintiff. The Taxing Master stated (at p. 73) that he could not accept the reliability of the estimated hours suggested by the plaintiff. He made some general comments (at p. 74), which he made clear were not intended as a criticism of the plaintiff's solicitors, which it is worth quoting, because they summarise his position. He stated:

      "Insofar as Solicitors' fees are concerned I believe that the use of recorded or estimated 'hours worked' as a basis for measuring professional fees while of assistance, must have a fully transparent and credible basis in order to minimise the danger of inflated assessment of professional fees. The onus of proof rests with the Claimant party and estimated time must be considered with particular vigilance. Recorded time should be backed by appropriately informative attendance note by way of explanation of the nature of and the necessity for the work in question. There should also be proof of concurrent recording of the time and the methodology adopted. In the absence of regulation, the system of recording time utilised by Solicitors (and other professionals) is not satisfactory. There may be little in the way of preservation of proof of time recorded and explanation of work done with specific reference to the length of time involved, specific tasks addressed, or dates work carried out."
58. The dispute between the defendant and the plaintiff which underlies the questions which the Court has to decide is whether, as the defendant contends, the methodology employed by the Taxing Master in assessing the general instructions fee was correct and in accordance with law or, alternatively, whether, as the plaintiff contends, the Taxing Master should have applied the methodology which the Court of Appeal found was the correct methodology. The latter methodology has been clearly outlined earlier in this judgment by reference to the judgment of the Court of Appeal. It is intended that the foregoing brief, and necessarily selective, outline of the methodology actually employed by the Taxing Master in assessing the general instructions fee, as discernible by reference to his ruling, should give some insight into the difference between the two approaches. However, the Taxing Master’s approach will be explained further in addressing Question (1), which will now be considered.

Question (1): Elevation of time in context of Order 99, rule 37(22)(ii)
59. Central to the defendant's submissions on question (1) are two fundamental propositions. The first is that the bill of costs presented on behalf of the plaintiff complied with the Rules and that the Court of Appeal erred in criticising the Taxing Master for failing to require the plaintiff to submit an amended bill of costs. For the reasons outlined earlier, I am satisfied that that proposition is correct. The second proposition is that the methodology employed by Mr. McEvoy on behalf of the defendant, and subsequently adopted by the Taxing Master in breaking down the instructions fee, is appropriate and is in accordance with established jurisprudence. The defendant contends that in the judgment of the Court of Appeal there is an inaccurate and unfair characterisation of the Taxing Master's assessment, and that the Court of Appeal erred in its finding as to the approach which the Taxing Master adopted. In support of the proposition that the methodology employed by the Taxing Master was correct, it is submitted that the Taxing Master carried out a root and branch examination of the work done by the plaintiff's solicitors, and that the Taxing Master had taken into account the time and labour expended and had fully complied with the principles set out in the C.D. case, as had been found by Kearns P. on the appeal to the High Court.

60. Those propositions are adverted to at the outset because it was submitted on behalf of the defendant that, if this Court determines that the Court of Appeal erred fundamentally, which is the defendant's case, this Court should conclude that the Taxing Master was correct in his assessment of the general instructions fee and that the matter should not be remitted. However, whether that submission could be acceded to would depend on the nature and effect of the fundamental error and, indeed, all relevant factors.

61. While Question (1) is framed in abstract terms, having regarding to the circumstances in which it arises, the question falls to be determined in the context of considering whether the methodology which the Court of Appeal determined that the Taxing Master should have adopted on the assessment of the general instructions fee on taxation of party and party costs is the correct methodology is accordance with the law. At the core of question (1) is whether the law, as derived from s. 27 of the Act of 1995, Order 99 of the Rules and the relevant authorities, as to the relative importance of the ascertainment of "time and labour expended" vis-à-vis the other relevant circumstances, including those expressly itemised in rule 37(22)(ii), in the assessment on taxation of the general instructions fee envisages the methodology proposed by the Court of Appeal being used by the Taxing Master and, in particular, whether the importance of time spent is such that the Taxing Master must give effect to the methodology outlined in the judgment of the Court of Appeal (at para. 57) and twice reiterated later (at paras. 94 and 126), albeit in different terms.

62. Focusing on what is stated in the judgment at paragraph 94, in outline, the Court of Appeal determined that the process proposed should start with the ascertainment of the time spent on each item of work, who did that work and the level of seniority of the doer, and the amount charged for each item of work, which “may” include an hourly charge. Having done that, the Taxing Master should consider, by reference to the skill, specialised knowledge and responsibility required in respect of the work, whether the amount charged for each item is fair and reasonable. It is only at that stage that the Taxing Master should assess the issues such as complexity, difficulty and novelty and the other matters referred to in rule 37(22)(ii). Contrary to the view expressed by Herbert J. in the C.D. case, that it is neither necessary, desirable, nor in certain circumstances possible, the process mandated by the Court of Appeal prescribes that the amount charged for each item of work should be ascertained. Further, I would observe that it is not definitively stated in the judgment of the Court of Appeal that the charge should be by reference to an hourly rate, in that both in paragraphs 24 and 94 it is stated that the hourly rate "may" be given, although what is stated in the judgment at paragraph 57(1) could be interpreted as meaning that setting out the hourly rate is mandatory.

63. In addressing Question (1), the position of the defendant is that the methodology which the Court of Appeal determined the Taxing Master must use is not in accordance with the law of this jurisdiction, in that it is not consistent with s. 27 of the Act of 1995, nor is it consistent with Order 99 of the Rules, which requires the Taxing Master to have regard to all relevant circumstances in exercising his discretion, including a wide range of specified circumstances. The methodology proposed by the Court of Appeal, it is submitted, elevates one of the relevant circumstances, namely, "the time and labour expended", and treats all of the other circumstances as being subsidiary to it. Further, determining the value of the work by reference to hours and hourly rates represents a fundamental change from the existing practice and it is a change in respect of which there has been no legislative or regulatory consideration of its implications. Moreover, it is submitted that the methodology proposed is not recognised in the pre-existing case law.

64. Both the Law Society and the Bar Council take the same position as the defendant in relation to Question (1) in their very helpful submissions to the Court, namely, that the time factor should not be elevated above the other factors to which, by virtue of Order 99, rule 37(22), the Taxing Master is mandated to have regard. Obviously, the focus of the Law Society in its submissions is on the solicitor's general instructions fee. What emerges from the submissions of the Law Society and, indeed, from the affidavit of Stuart Gilhooly, the President of the Law Society, which grounded the application for the joinder of the Law Society as an amicus curiae, is that the requirement laid down in the judgment of the Court of Appeal that there should be set out in the bill of costs "a specific record of hours worked" has, since that judgment was delivered, given rise to significant changes in the practice of taxation of costs, with consequent delays in the taxation process.

65. The main focus in the submissions on behalf of the Bar Council has been on barristers' fees, in particular, brief fees. It is important to emphasise that, in this regard, the provisions of s. 27(1) and (2) of the Act of 1995 apply to "counsel (whether senior or junior)" in precisely the same way as they apply to a solicitor. Accordingly, as the statutory provisions and the provisions of the Rules under consideration in relation to Question (1), s.27 of the Act of 1995, and Order 99 of the Rules, in particular, rule 37(22), do not distinguish between a solicitor and a barrister, I do not consider it necessary to consider the position of a barrister as distinct from that of a solicitor. Accordingly, what follows applies to both solicitors and barristers.66. Understandably, in addressing Question (1), the plaintiff focuses on the approach adopted by the Taxing Master and the criticism of that approach in the judgment of the Court of Appeal. It is submitted that the approach taken by the Taxing Master was entirely at odds with the approach advocated by Herbert J. in the C.D. case and by Ryan J. in the Cafolla case. What the Taxing Master did, it is submitted, was to take account of the fact that work occurred within one calendar year, but he did not take account of how long each task actually took. In doing so, the Taxing Master rejected the utility of estimating time spent, which, indeed, is reflected in the passages from the second ruling quoted earlier. This approach, it is suggested, directly contradicts the approach advocated by the High Court in the C.D. case and in the Cafolla case.

67. The plaintiff submits that the approach which the Court of Appeal held should have been adopted by the Taxing Master, on the other hand, does accord with the decisions in the C.D. case and the Cafolla case. It is emphasised that the Court of Appeal in its judgment (at para. 85) found that the Taxing Master "did not assess properly the amount of time and labour spent on each professional activity and/or assess an appropriate professional fee or charge for each activity". Emphasis is also placed on what is stated in the judgment of the Court of Appeal (at para. 92), which, while reiterating what was stated earlier as to the correct methodology as to the assessment of the bill of costs, in broad terms, that assessment of the time taken to perform the task should be the first step, goes on to state:

      "That is not to say that all other factors set out in O. 99 r. 37(22) are not to be considered. They should be considered but only after the preliminary exercise of time and labour have been assessed. To assess an instruction fee by reference to all other criteria set out in O. 99 r. 37 but to ignore 'time and labour' and then to cross-check such an instruction fee by reference to the time spent is, in my view, the wrong approach by which to assess the instruction fee."
In the light of those comments, the plaintiff characterises the approach adopted by the Taxing Master as having relegated the assessment of time to a checking mechanism and thus to a status below the other criteria set out in rule 37(22)(ii). Accordingly, it is suggested, the issue is not one of the Court of Appeal elevating time above the other factors, but rather it is one of the Taxing Master having relegated time from its rightful position as a central consideration in putting "value on the work done to one of merely testing an already ascertained value".

68. In the interests of clarity, it is appropriate to return to an aspect of the requirements set out in the Court of Appeal judgment in relation to the bill of costs, which arises in the context of Question (1), and which is of concern to, and has been highlighted by, the Law Society in its submissions. It will be recalled that, in deciding to remit the matter to the Taxing Master for revised taxation, the Court of Appeal in its judgment (at para. 188) directed that a proper bill of costs should be drawn up which sets out, as fully as possible, the time and labour expended by the solicitor. Earlier in the judgment (at paras. 23 and 24), by reference to Order 99, rule 29(5) of the Rules, it was suggested that the bill of costs should include “the amount of time undertaken in respect of each activity”, and that “a specific record of hours should be kept and set out in the bill of costs”. In considering whether the bill of costs presented on behalf of the plaintiff in this case complied with the requirements of Order 99 earlier, the principal consideration was whether Order 99 imposes an obligation to ascribe a specific cost or charge to each item of professional service embodied in the general instructions fee. I have concluded earlier (at para. 50) that it did not. Likewise, there is nothing in Order 99 which imposes an obligation to either keep a record of hours, or to set out time spent in the bill of costs.

69. A further concern of the Law Society relates to what are described as “alternative fee mechanisms”, such as fixed fees, capped fees, and fees discounted for volume. The concern is that, where such an arrangement exists between the solicitor and the client, it would be onerous to expect a solicitor to expend time recording time. As I have found that an obligation is not imposed by the Rules to record time, and to include time records in the bill of costs, it is not necessary to address those particular arrangements. In any event, I would be reluctant to express a view on the application of s.27 of the Act of 1995 and Order 99 of the Rules to such fees in the abstract, and in the absence of submissions from a legitimus contradictor.

70. In the earlier discussion of the decisions of the High Court in the C.D. case, and in the Cafolla case, I concluded that the approach stipulated by Herbert J. in the C.D. case accords with s.27 of the Act of 1995, and with Order 99 of the Rules, but I left in abeyance whether the methodology directed in the judgment of the Court of Appeal accords with s.27 and Order 99. Having considered the mandated methodology, as set out by the Court of Appeal in its judgment at paragraph 94, in the context of the discussion of the “Time” issue, with a specific reference to the general instructions fee, in my view, it does not.

71. The function of the Taxing Master, as prescribed in s.27(1), is to examine the nature and extent of the work done, and to assess and determine the value of it. In the exercise of his or her discretion under s.27(2), to allow or disallow costs claimed, he or she must do so in a manner that is fair and reasonable. The rules contained in Order 99 in relation to taxation of costs are more specific than the statutory provisions in relation to the performance by the Taxing Master of his function, in particular, as to the exercise of his or her discretion. Of course, the relevant rules, for example, rule 37(18) and rule 37(22)(ii) must now be construed and applied, having regard to the provisions of s.27(1) and (2) of the Act of 1995. It has not be asserted on this appeal by any of the parties that that presents a difficulty. As regards the application of the rules to this appeal, in my view, it does not.

72. Where the approach to be adopted by the Taxing Master, as mandated by the Court of Appeal in its judgment at paragraph 94, departs from the approach envisaged in Order 99, when interpreted in the context of s.27(1) and (2), is in stipulating that, in the assessment of the general instructions fee, the starting point must be the ascertainment of time, that is to say, the hours worked, in relation to each item of the instructions fee, and by reference to who did the work. The analysis which it is mandated should then occur, apparently in relation to the professional charge for each individual activity, requires the application of the test of reasonableness to the hourly rate, by reference to the number of hours spent and the level of seniority of the solicitor involved. The possibility that an adjustment upwards or downwards of the figure arrived at may then arise because of the other circumstances set out in rule 37(22)(ii), is then recognised. That form of assessment, as the defendant submits, would be a re-writing of Order 99, in that it would elevate time and labour expended above all of the other relevant circumstances and, in particular, the circumstances expressly specified in rule 37(22)(ii). Apart from that, as Herbert J. made clear in his judgment in the C.D. case, Order 99 does not require the Taxing Master to value each item in the bill of costs which makes up the general instructions fee. Neither does Order 99 require that the parties seeking to have costs taxed under Order 99 should ascribe hours worked, or a costs charge, in respect of each item making up the general instructions fee in the bill of costs.

73. Similarly, what the Court of Appeal suggests is the correct approach for the Taxing Master to adopt in relation to the general instructions fee in the judgment at paragraph 126, which recommends a process in which the relevant circumstances outlined in rule 37(22)(ii) other than time spent should only be considered after an assessment of time spent by reference, inter alia, to the number of hours spent and the hourly rate, and the appropriate professional charge for each element of a professional service, is not in accordance with Order 99. Although what is characterised as the “correct methodology to be followed by a Taxing Master”, as set out in paragraph 57 of the judgment, is phrased somewhat differently, nonetheless, time spent is there elevated above the other circumstances listed in rule 37(22)(ii), such as complexity and difficulty, which I would consider to be important factors in the assessment of the nature and extent of the work under scrutiny and in putting a value on it. For the foregoing reasons, I have come to the conclusion that the defendant is correct, and that the methodology which the Court of Appeal determined the Taxing Master must use in the taxation of the general instructions fee is not in accordance with law.

74. Following the analysis of the passages from the judgment of Herbert J. in the C.D. case quoted earlier, I concluded that the proper approach to the taxation by the Taxing Master of the general instructions fee is as outlined therein, it being in accordance with s.27 of the Act of 1995, and Order 99, and with particular emphasis on the statement in the second passage quoted, that value does not have to be put on each of the individual items making up the general instructions fee. In relation to the circumstances outlined in rule 37(22)(ii), the relevance and importance of each of those circumstances will vary from case to case, so that the sequence in which it is appropriate to consider them will vary from case to case. As a central feature of the function of the Taxing Master in the taxation of costs under s.27(1) is to examine the nature and extent of the work done, with a view to assessing the value of the work done, Herbert J. was correct in pointing to ascertaining precisely what work was done as the starting position for the exercise by the Taxing Master of his function. That task is to be done by reference not only to the bill of costs, but also supporting documentation. Time is a factor to which the Taxing Master must have regard. If it is in issue, he should indicate the amount of time he or she considers should reasonably have been devoted to the work, but as Herbert J. stated, he or she should do so to the extent that the nature of the work and the information available to him or her permits. In relation to time, the availability of supporting documentation is clearly of significance. Supporting documentation may be in the form of a contemporaneous record of time spent, or, perhaps, a document estimating the time spent based on other contemporaneous evidence, or, if allowed by the Taxing Master, it might be in the form of a retrospective reconstruction of the time spent on the work done. It is for the Taxing Master to assess the evidential value of the documentation available in support of costs claimed. Therefore, it is undoubtedly in the interest of a solicitor or barrister that time records, or other documents containing accurate and credible evidence of time spent, are available to the Taxing Master, in the event that a dispute arises in the course of the taxation, because such documentary evidence goes, albeit not exclusively, to the nature, extent and value of the work done. However, as has been made clear earlier, there is no obligation on the solicitor or barrister to maintain time records, or to include time records in the bill of costs. On a different point, identifying the doer of the work, and his or her place in the hierarchy of key earners, at the same time as identifying the work done, is a sensible approach. Herbert J., in my view, correctly places consideration of other relevant circumstances, outlined in rule 37(22)(ii), such as what he refers to as “special skill”, and other matters prescribed by Order 99, for example, by rule 37(18), such as the necessity of the work for the attainment of justice, after ascertainment of the work done. In short, the passages from the judgment of Herbert J. provide useful guidance for the Taxing Master in the assessment of the general instructions fee, although, of course, they do not cover the vast range of situations which may arise in taxation matters.

75. Before attempting to answer Question (1) in the abstract, in order to resolve the dispute between the defendant and the plaintiff, it is necessary to determine whether the Taxing Master should have dealt with the taxation of the general instructions fee in the manner suggested by Herbert J., and, if he should have, whether he did so. I have no doubt that the Taxing Master should have done so. As to what he did in his second ruling on the assessment of the instructions fee, it is necessary to consider what is set out in the pages of the ruling appended to the judgment of Kearns P. It is useful to consider first the approach he adopted in relation to 2009, which has been taken as an example previously in considering the methodology employed by the Taxing Master.

76. As the Table in the Appendix to this judgment illustrates, the defendant’s proposal in relation to 2009 was a fee of €20,000, the plaintiff’s suggested fee was €60,000, and the Taxing Master’s allowance was €20,000. In fact, following the hearing on the objections, the allowance remained at €20,000. At the beginning of the assessment in the second ruling (at page 63), the Taxing Master commented on the statement in the plaintiff’s written submissions that the figures mentioned were based on hours spent, referencing €375 per hour “for illustration”. The Taxing Master stated that the insertion of the rate “for illustration” was not tenable; the “time spent” must either be definite or a calculation by way of reasonable estimate.

77. When it came to dealing with the year 2009, the Taxing Master recorded that in the written submissions the plaintiff had “faithfully recorded” the work undertaken for that year, for which €60,000 was being claimed, pointing out that he had assessed the same work at €20,000, and that he had been in agreement with the defendant’s assessment. The Taxing Master then went on to consider the nature of the work being conducted at that time, mentioning the finalisation of the gathering-in of medical records, receipt and consideration of expert reports, and submitting instructions to experts on the issues, such as the causation issue. Following that analysis, the Taxing Master stated that he fundamentally disagreed with the plaintiff’s solicitor’s valuation of the work for the period at €60,000. In his view, the work undertaken was fairly measured at €20,000, and that sum properly and adequately reflected such work, both as to its nature and extent. The Taxing Master then did some analysis of the plaintiff’s valuation at €60,000 by reference to the various hourly rates, which he said had been suggested by the plaintiff’s solicitors. That exercise, which appears to have been the application of the cross-checking or test mechanism decried by the Court of Appeal, to the 2009 period, in this context, in my view, was inappropriate, and was a totally meaningless exercise. Following that, the Taxing Master stated:

      “I assessed the allowance of €20,000 based upon the extent of the work, the submissions of the parties and the period of time involved, not the number of hours, during which the work was carried out.”
Having compared the work undertaken by the plaintiff in the year 2009, as recorded in the written submissions before him, with the Taxing Master’s approach in relation to that year in the ruling, I cannot see what else the Taxing Master could have done. He did not have any time records or estimates of time. As the Taxing Master persistently remarked, the duty was on the plaintiff to produce the supporting documentary evidence. Leaving aside whether the plaintiff should have been allowed to do a retrospective reconstruction of the time spent in 2009 on the case, I am satisfied that, as regards the year 2009, on the evidence before the Taxing Master, even though the allowance he made for that year was one-third of the amount claimed by the plaintiff, it has not been demonstrated that the approach he adopted in relation to determining that allowance was inconsistent with a proper approach, as outlined in the judgment of Herbert J. in the C.D. case. He ascertained precisely what work was done by reference to the documentation furnished to him. However, that information did not enable him to make any decision as to the amount of time which was actually spent, or should have been spent. In the foregoing analysis of the approach adopted by the Taxing Master in respect of the periods for which there are no time records, the 2009 period was chosen by way of example. However, I am satisfied that an analysis of the 2008 period, and of the 2010 period, would result in a similar conclusion, as I have reached in relation the 2009 period.

78. The position in relation to work done in 2011 is more complex, but also confusing. In relation to the work done in 2011, the Table in the Appendix to this judgment illustrates that the fee suggested by the plaintiff comprised a sum of €180,000, together with two sums aggregating €165,000 for work in respect of which time records existed, totalling €345,000. The Taxing Master explained his assessment of the figures which appear in the Table, and which aggregate €215,000, in the following passage in his ruling, to which counsel for the defendant drew the Court’s attention:

      “I assessed the sum of €175,000 on the basis of the nature and extent of the work carried out for the entire period of assessable work, up to the date of settlement, with the exception of the remaining work relating to preparation of briefs, exchange of experts' reports, attendance at settlement meeting and reorganising of Witnesses for which I added a further €30,000. In addition a further sum of €10,000 was added to cater for the costs of attendance at Court on 18, 19, 20 and 21 October (full days) and 25 and 26 October 2011 (half days).” (Emphasis in original)
79. From the paragraph which preceded that passage in the second ruling, it is clear that one objective of the passage was to correct what appeared to be a mistaken understanding on the part of the plaintiff’s solicitors of the Taxing Master’s assessment for 2011, as set out in the Table, the Taxing Master stating that it suggested that his assessment for the period was €175,000, and that the defendant had put forward €150,000 as the appropriate sum. In short, in the passage quoted, the Taxing Master was clearly stating that the sum of €175,000 covered all of the work done up to 26th October, 2011, with the exception of the five items specified. It had been accepted by the plaintiff in the written submissions that the corrected time spent, as shown in the time records, from the time they were kept up to the 26th October, 2011, was 439 hours. So the figure at which the Taxing Master measured the fees for all work carried out from 1st January, 2011 up to 26th October, 2011, €215,000, covered the unrecorded time, and the recorded time of 439 hours, but some of the work to which the 439 hours related, the preparation and the court attendance, were separately measured at €30,000 and €10,000. Following the hearing of the objections, the Taxing Master increased the figure of €10,000 to €16,000. Accordingly, at the time of the review by the High Court under Order 99, rule 38(3), the difference between the figure allowed by the Taxing Master for the work done in 2011, and the figure which the plaintiff contended should be allowed, was €124,000. In other words, the allowance represented 64% of the plaintiff’s proposed fee, so that in the taxation process the plaintiff’s proposed fee was reduced by 36%. Given that the figure of €16,000 for court attendance is the subject of one of the issues on this appeal, the “two seniors issue”, that difference may change as a result of this Court’s decision on the “two seniors issue”. On the basis of the hourly rate which it was argued on behalf of the plaintiff was appropriate, €375 per hour, the fee of €180,000 claimed by the plaintiff for estimated time in the year 2011 was based on 480 hours. The Taxing Master stated that he could not accept the reliability of the estimated hours. He said that no real assessment was apparently involved. He also said that the recorded hours needed to be treated with a degree of diligence. The passage from the ruling (at page 74), quoted earlier, followed those observations. While, in principle, one would not disagree with those observations, it is difficult to determine how the Taxing Master applied them to the complex situation which he was faced with in relation to the 2011 period where, in relation to work done, the plaintiff was basing the proposed general instructions fee on both estimated and recorded time. In particular, it is not clear how the Taxing Master, on the facts before him, came to the conclusion that the value of the work done was 36% less than the plaintiff contended.

80. The detailed analysis in the preceding paragraphs as to the manner in which the Taxing Master, in the second ruling, ascertained the work done by the plaintiff, and put value on it, has been necessitated by the defendant’s submission that, even if this Court finds that the Court of Appeal erred, the Court should conclude that the Taxing Master was correct in his assessment of the general instructions fee, and that the matter should not be remitted. I will return to that issue when all of the questions which the Court is addressing have been dealt with.

81. I consider that it is appropriate to preface the answer to Question (1) by reiterating that, in the assessment of the general instructions fee, the manner in which the Taxing Master should properly ascertain the nature and extent of the work done by the solicitor, and should exercise his discretion in allowing or disallowing the fee claimed in the solicitor’s bill of costs, in accordance with s.27(1) and (2) of the Act of 1995, and in accordance with the requirements of Order 99 of the Rules, is to be extrapolated from the judgment of Herbert J. in the C.D. case. The amount of time actually spent on a case is only one element of the relevant circumstances by reference to which the nature and extent of the work done is assessed. Accordingly, the answer to Question (1) is that, as a general proposition, the amount of time actually spent on a case should not be elevated above the relevant criteria mandated by Order 99, rule 37(22), for fixing costs.

Question (2): Retrospective reconstruction
82. There are two features of this question which it is necessary to comment on.

83. First, as formulated, it is a precondition to consideration of the Question (2) that this Court will have determined that “the amount of time spent is the central part of the analysis for the Taxing Master in assessing costs.” The issue which the Court is required to, and has, considered in Question (1) is whether, and to what extent, time spent may “be elevated above” the other relevant criteria mandated in Order 99, rule 37(22)(ii). Adverting to the difference between Question (1) and Question (2) is not mere “hair-splitting”, because the concept of centrality, rather than elevation, of time spent forms the basis of the plaintiff’s argument that the Court of Appeal was correct in remitting the matter for renewed taxation, and directing that the Taxing Master follow the methodology set out in its judgment. The distinction between the two questions has been noted in order to obviate any misinterpretation of the Court’s consideration of Question (1). It is emphasised that Question (2) has had no relevance to the determination of Question (1). In any event, in the light of what has happened in the taxation and review process in this case to date, I consider that it is appropriate to give guidance on the question of whether, and in what circumstances, the Taxing Master should allow retrospective reconstruction of time spent, without considering the precondition any further.

84. Secondly, it is noted that Question (2) concerns whether the Taxing Master should “allow” a retrospective reconstruction of time spent, not whether he or she should direct such a reconstruction. It is obvious that the reason Question (2) is posed is the finding of the Court of Appeal that the Taxing Master committed a significant error in refusing the offer of the plaintiff’s solicitors “to reconstruct the time spent”, and in directing the plaintiff’s solicitors not to do so. As indicated earlier, I will address the uncertainty and confusion underlying that finding later. As there is a very large degree of consensus between all of the parties on the approach this Court should adopt in answering Question (2), I find that it is not necessary to consider the “allow” and “direct” dichotomy any further.

85. That consensus flows from the effect of Order 99, rule 25, which provides:

      “The Taxing Master may, for the purpose of taxing a bill of costs, summon and examine witnesses, administer oaths, direct production of books, papers and documents, require any party to be represented by a separate solicitor, and generally direct any party to the taxation to do such acts as he may consider necessary.”
86. The defendant’s analysis of the application of the power conferred by Order 99, rule 25 to retrospective reconstruction of time spent is helpful, and, except in one respect, the plaintiff agrees with it. It is stated that the Taxing Master has power to direct parties to produce retrospective estimates, if he or she deems it necessary. It is emphasised that it is a matter for the discretion of the Taxing Master. It is submitted, however, that it should not be mandatory in all taxations, and that the necessity to produce a retrospective estimate should be determined on a case by case basis. The defendant suggests that the following factors may be relevant to the exercise of the discretion:
      (a) The position of parties as to whether it is necessary that time estimates be produced, it being suggested that where both parties agree that it is not necessary, the Taxing Master should not be obliged to direct that a retrospective estimate be produced or carry out his own.

      (b) Where a party has prepared a retrospective estimate prior to taxation, and wishes to rely on the same, the Taxing Master should consider whether, in all the circumstances, it is proper to allow the party to do so and, if he does allow the party so to do, to ensure that the opposing party has an opportunity to fully interrogate it.

      (c) The nature of the case and the amount of costs claimed, pointing to the variety of cases which may go to taxation, for example, complex and lengthy High Court proceedings and, in contrast, straightforward Circuit Court debt recovery and personal injuries cases, it being suggested that a requirement to adduce time estimates in all cases for the amount of costs claimed would place an extremely onerous obligation on practitioners, the Taxing Master and County Registrars, and is not required by section 27.

      (d) Whether any contemporaneous records of time expended have been maintained.

87. The plaintiff is in agreement with the foregoing analysis of the power of the Taxing Master, and how it should be exercised. The point is made in relation to the factor listed at (c), that it would be appropriate to allow the production of retrospective estimates in the plaintiff’s case, which was lengthy and complex, and where the figures claimed for costs were substantial. The additional factor suggested by the defendant as possibly being relevant to the exercise of the Taxing Master’s discretion, with which the plaintiff disagrees, is whether or not there is an agreement with the client in relation to hourly rates, or charging on a time-cost basis. The plaintiff’s objection to consideration of this factor is based on the understanding that it assumes that time expended is only relevant to the assessment of the instruction fee with reference to hourly rates, whereas the assessment of time expended is a mandatory criterion under Order 99, rule 37(22)(ii). The basis of the defendant’s suggestion that it may be a relevant factor is that most plaintiff actions for personal injuries and medical negligence proceed on a “no foal, no fee” basis, with no agreement with the client in relation to hourly rates or time costing. It is not clear whether the defendant is suggesting that where an action has proceeded on a “no foal, no fee” basis, the Taxing Master should exercise his discretion against either directing or allowing a retrospective time estimate. If that is the suggestion, I consider that it is far too prescriptive, and that the Taxing Master’s discretion should not be interfered with in that way. However, if the concern is that there may not be any contemporaneous records, obviously, that is a factor which the Taxing Master should have regard to, as already outlined above.

88. Like the other parties, the Law Society emphasises the discretionary nature of the power of the Taxing Master, and suggests that curial deference should be shown to the Taxing Master in the exercise of his discretion in procedural decisions, as well as substantive determinations. However, it is pointed out that the Taxing Master is obliged to perform his or her functions in conformity with the European Convention on Human Rights (the Convention), by virtue of s.3 of the European Convention on Human Rights Act, 2003. In particular, it is submitted that the Taxing Master is obliged, when deciding whether or not to order reconstruction of records, to avoid any decision which risks giving rise to an interference with the right under Article 6.1 of the Convention to reasonable expedition, citing the judgment of the European Court of Human Rights in Superwood v. Ireland (8 September, 2001, 5th Section) in which the European Court of Human Rights extended the protection of Article 6 to taxation of costs procedure. As I have determined that there is no obligation imposed by Order 99 to include time records in a bill of costs, the “fall-back” position of the Law Society, that such requirements should be of prospective effect only, does not have to be considered.

89. In the submissions of the Bar Council, once again, the focus is on barristers’ fees, rather than on, say, the solicitor’s instructions fee. The Bar Council makes the point that, as barristers do not generally keep time records, the requirement to produce them, or retrospectively to create and produce them, is impractical and serves only to elongate the taxation process.

90. Answering the general question as to whether the Taxing Master has power to allow, or direct, the production of retrospective reconstruction of time spent, I am satisfied that he or she has such power. It is a discretionary power, which should be exercised having regard to all of the relevant circumstances, including the factors suggested by the defendant and with which the plaintiff agrees, which are outlined above. Obviously, the Taxing Master must have regard to the rights of the litigant, including the right of the litigant to reasonable expedition under Article 6 of the Convention, in the exercise of that discretion.

91. Turning now to the specific dispute in relation to retrospective reconstruction of time records which arose on the taxation in this case, I will now set out my understanding of the controversy between the defendant and the plaintiff. While reiterating the earlier observations that there is a considerable degree of uncertainty and, indeed, confusion as to what actually transpired before the Taxing Master in relation to the possibility of the plaintiff's solicitors reconstructing the time spent, my understanding is that, as the plaintiff contends, the plaintiff's solicitors offered to provide time estimates in relation to the work undertaken prior to 29th June, 2011. The defendant does not dispute that, but the defendant's position is that, while the Taxing Master did not in fact direct the plaintiff to complete a retrospective estimate of time, the Taxing Master did not actually refuse or prevent the plaintiff from adducing such estimate. On that basis, it is suggested on behalf of the defendant that the Court of Appeal was wrong in finding that there was such a refusal. The plaintiff, however, points to the observations of the Taxing Master in his ruling on the objections (at p. 74), quoted earlier, which, it is suggested, represents the Taxing Master's express disapproval of retrospective assessments. I would construe those observations as the expression of genuine concerns as to the accuracy of retrospective reconstruction of time records, and of the need to test such accuracy. Having outlined my understanding of the controversy between the parties, I can go no further and, in particular, I am not in a position to make any determination as to the reason why a reconstruction of time was not before the Taxing Master for consideration by him.

92. Accordingly, notwithstanding that I have carefully considered such information as was put before this Court as to what transpired at each stage before the Taxing Master (albeit limited to the two rulings of the Taxing Master, the written submissions at review stage before the Taxing Master, and extracts from transcripts of the review hearing before the Taxing Master), it is not possible to agree with the conclusion of the Court of Appeal that there was a significant error on the part of the Taxing Master in relation to retrospective reconstruction.

Question (3): Disallowance of costs of two solicitors
93. Appropriately, neither the Law Society, nor the Bar Council, has expressed any view on Question (3).

94. While Question (3), like the other questions, is framed in the abstract, in reality this question can only be considered against the factual background of the case and, in particular, what happened at, and the result of, the hearing on the objections. As it is succinctly put in the judgment of the Court of Appeal, the issue in dispute between the defendant and the plaintiff is the difference in costs between one junior solicitor and a senior solicitor in court for the duration of the hearing over 6 days. Looking at it within the framework of s.27(2) of the Act of 1995, what happened was that the Taxing Master, exercising the power conferred by him by that provision, disallowed part of the claim for costs to cover two senior solicitors over six days of the hearing, and instead allowed the attendance of a senior solicitor and the notional attendance of an assistant solicitor at court on all the days. The jurisdiction conferred by s.27(2) under which the Taxing Master was entitled to make that decision was exercisable, if the Taxing Master considered it “to be fair and reasonable in the circumstances of the case”. But that jurisdiction was subject to review by the High Court under s.27(3) of the Act of 1995, under the provisions of which the High Court may review a decision subject to compliance with two requirements. The first is that the High Court is satisfied that the Taxing Master has erred as to the amount of the allowance or disallowance. The second is that the error is such that the decision of the Taxing Master is unjust. That provision merely refers to the Taxing Master having erred, and it does not circumscribe in any way the nature of the error, so that it may be an error of fact, an error of law, or an error of principle. What brings the error within the scope of the review is that it results in the decision being unjust.

95. The decision of the Taxing Master at issue is the decision made in the ruling following the hearing on the objections brought in by the plaintiff. The Taxing Master dealt very comprehensively with the issue in his second ruling (at p.23 to p.32). He outlined the un-contradicted evidence he heard from the witnesses who are referred to in the judgment of the Court of Appeal and who had testified on behalf of the plaintiff. He was acutely conscious that the taxation before him was of party and party costs, obliquely referring to the oft cited statement by Sullivan M.R. in Dyott v. Reade 10 I.L.T.R. 111, that in costs between party and party one “cannot indulge in a luxury off-payment”, and the more recent characterisation of party and party costs as being de minimis in nature by Kearns P. in Bourbon v. Ward [2012] I.E.H.C. 30 ("the Bourbon case"). That prompted him to pose two questions:

      (a) Was it necessary to the proof of the plaintiff’s damages to have two solicitors present in court, and at the settlement negotiations?

      (b) If so, can the costs of having two equally competent specialist solicitors at court be allowed as between party and party?

In the second ruling, he answered those questions by reference to what he had stated in the first ruling. On the first question, he stated that he did not see the necessity for the attendance of two specialists, both of whom were eminently qualified to advise the plaintiff, and to take part in the negotiations in their own right, pointing out that at the hearing stage of the proceedings the case was unequivocally one of assessment of damages only. On the second question, he said that, in his view, the cost of attendance of the additional senior solicitor was not recoverable on a party and party basis. He did, however, state (at p.75) that he was allowing the objection to the extent of increasing the Court attendance allowance to take into account the attendance of a senior solicitor and “the notice of attendance of an Assistant Solicitor at Court on all days”, which resulted in the increase in the increase of the allowance from €10,000 to €16,000.

96. On the review in the High Court under s.27(3) of the Act of 1995, Kearns P. determined that the Taxing Master was “perfectly correct” to reach the issue he had reached on the two senior solicitors issue. He too was conscious of the fact that the costs at issue were party and party costs, citing a number of authorities in which it was held that “luxuries” are not recoverable on party and party taxation. He referred to the fact that the hearing was an assessment of damages only. He also referred to the fact that the Taxing Master had made an appropriate allowance for a junior solicitor to be present to assist in co-ordinating witnesses and organising documentation. He dismissed an argument on behalf of the plaintiff that an equality of arms issue arose, because it was contended on behalf of the plaintiff that two senior solicitors from the firm on record for the defendant were present. He pointed out that the plaintiff was represented and advised by a very experienced team of senior and junior counsel, stating that, when litigation moves into the courtroom setting, the primary responsibility for the carriage of the proceedings devolves to counsel.

97. As has been recorded earlier, on the appeal from the High Court, the Court of Appeal reached a different conclusion to the High Court, and concluded that there was an error on the part of the Taxing Master which amounted to an injustice. The reasons for reaching that conclusion are set out as follows, in the judgment of the Court of Appeal (at para. 148), where it was stated:

      “I am of the view, on the facts of the present case, that there was a requirement for two senior solicitors to be present. The injuries to the infant plaintiff were catastrophic and the assessment of damages hearing was one which would have a profound influence on the medical care which she would receive for the rest of her life. Whilst it is true that the case proceeded as an assessment only, nevertheless it was a difficult, complex and hard-fought assessment. Moreover, it is clear that a senior solicitor was required to conduct the case in court and another senior solicitor was required to carry out simultaneous negotiations outside court. I am not convinced that the attendance of two senior solicitors was a ‘luxury’; I think it was necessary and proper for the attainment of justice and also for the enforcement of the plaintiff's rights in this case where she had been so catastrophically damaged by the admitted negligence of the defendant. It is, in my view, also of some relevance that the defendant had retained two senior solicitors in court throughout this time. I am of the view that the court is entitled to have regard to this fact.”
98. In the defendant’s submissions, attention has been drawn to a number of decisions of the High Court since the enactment of the Act of 1995, in which a curial deference has been shown to the Taxing Master, and there has been a reluctance on the part of the High Court judges to interfere with the Taxing Master’s determination, one being the decision of Kearns J. in Superquinn v. Bray U.D.C. (No. 2) [2001] 1 I.R. 459, ("the Superquinn case"), where it was stated that the wording of s.27(3) seems to represent a significant shift of emphasis, and to impose a heavier burden on any party seeking to challenge a ruling of the Taxing Master. Kearns J. stated that, having regard to that provision, taken in conjunction with s.27(1) and (2), the court should “exercise a considerable degree of judicial restraint in the context of a review, although it must clearly intervene if failure to do so would result in an injustice”. In response to that submission, the plaintiff questions why a court should be expected to defer to a Taxing Master on an issue such as is involved here, it being suggested that, while the Taxing Master does have expertise in relation to the preparation of bills of costs and the evaluation of fees appropriate to professional services, he or she has no particular expertise in relation to the conduct of trials, whereas the court has the relevant expertise. While I am inclined to agree with that proposition, when considered at a superficial level, it does not solve the problem. A High Court judge found that the Taxing Master did not err, whereas three judges sitting on the Court of Appeal found that he did. It must be acknowledged that which court is right and which is wrong on the application of s.27(3) is somewhat marginal. Nonetheless, the reasons set out in the judgment of the Court of Appeal quoted above are more conducive to the view that the Taxing Master erred in not allowing for the two senior solicitors in such an important and difficult case, and the error has resulted in the amount allowed for court attendance being unjust. For that reason, I have come to the conclusion that it would not be appropriate to affirm the decision of the Taxing Master on this issue. Rather, I consider that the issue should be remitted for reconsideration. Lest resorting to superficiality in determining whether the Taxing Master erred on this issue gives a wrong impression as to the extent to which curial deference should be shown to a Taxing Master on a review of taxation under s.27(3), it must be emphasised that the Court will respect the expertise of the Taxing Master on those issues within his or her expertise.

99. For what it is worth, I would answer Question (3) as follows. I would answer the first limb in the affirmative. The answer to the second limb is that the review of a decision of the Taxing Master must be conducted in accordance with s.27(3) of the Act of 1995.

Question (4): Relevance of general economic conditions
100. In order to put Question (4) in perspective, it is useful to outline how consideration of the “economic downturn” issue arose before the Taxing Master, on the review in the High Court and in the Court of Appeal.

101. The issue arose before the Taxing Master out of the plaintiff’s objection to the Taxing Master’s rejection of the comparator cases which had been relied on by the plaintiff on the taxation. The Taxing Master, in the second ruling, observed (at p.51) that “levels or rates of costs heretofore allowed may no longer be appropriate”, citing two decisions of the High Court as two examples. The first example was Re Missford [2010] 3 I.R. 756, ("the Missford case"), which concerned the determination of remuneration and costs of an interim examiner, pursuant to a provision of the Companies (Amendment) Act, 1990, which empowered the High Court to make such orders “as it thinks proper” for such payments. The second example was the decision of the High Court (Kearns P.) in the Bourbon case, which arose from a review by the High Court of a decision of a Taxing Master, pursuant to Order 99 rule 38(3) of the Rules. In explaining the approach he had adopted on taxation in relation to the comparators relied on by the plaintiff, the Taxing Master said:

      “… I do not believe that any reasonable allowance has been made for the current straitened economic conditions which have greatly affected the general public and all professionals’ fees in recent time, including those of lawyers.”
The Taxing Master then explained what he had done at the taxation stage as follows:
      “I did not impose a fee reduction from previously acceptable norms but carried out a full assessment of the nature and extent of the solicitors’ work herein bearing in mind the comparators and in my view that substantial error had been entered into in the manner of their use.”
On the hearing of the objections, additional comparators were put before the Taxing Master by both sides, which were analysed by him in the second ruling. As regards all of the comparators, the Taxing Master stated that, having given them full consideration, he considered it would be wholly wrong to place reliance upon them.

102. In the judgment of the High Court on the review, Kearns P. recorded (at p.37) that both sides in the case accepted that:

      “… there has been a severe downward correction in the nation’s finances since 2007, not merely across the public services sector, but extending into the private and professional sector also, frequently resulting in marked reductions in professional fees and remuneration.”
Having quoted the views he expressed in concluding his judgment in the Bourbon case, Kearns P. stated that it was not clear to him that the then current extreme financial crisis in this country had been factored into the taxation process, and that there was a strong case for arguing that it should be, Kearns P. stated (at p. 39):
      “While there has been some levelling off or even reductions in legal costs in recent years, it seems to this Court that the Taxing Master can best give effect to this particular consideration with some measure of precision which would satisfy practitioners, perhaps the public also, and most importantly, serve the interests of justice and transparency.”
103. In essence, Kearns P. made two suggestions as to how the economic downturn post 2007 might be addressed within the taxation of costs process. First, he quoted from the judgment of Kelly J. in the Missford case (paras. 36 to 41 inclusive) where Kelly J. considered the necessity for a reduction in professional fees, giving as one example the fact that between 2007 and 2010 there had been reductions amounting to more than 16% in fees paid by the State in respect of both prosecution and defence work in criminal cases. Kelly J. applied a similar reduction in fixing the hourly charge-out rate in the case before him. Kearns P. then stated (at p.43):
      “I see absolutely no reason why a similar approach should not inform the approach adopted by the Taxing Master to claims for professional fees which he has to consider. In this regard, historic comparators will be of limited value as noted in an earlier part of this judgment.”
104. The function of the Taxing Master on taxation differs from the function of the High Court in applying the statutory provision which empowers it to fix the remuneration of an interim examiner, and it seems to me that, for that reason, the approach adopted in the Missford case is not appropriate in the taxation of costs process. Having said that, obviously, in assessing the nature and extent of work done, say in relation to the solicitor’s instructions fee, and in putting value on such work, which is the function of the Taxing Master, the Taxing Master should have regard to the impact of the economic climate at the time the work was done on the remunerative value of that work, and this may occur in various ways. For example, it may be that a comparator cited by a party to the taxation process is inappropriate because the remunerative value of the work done in the case under consideration by the Taxing Master had decreased or increased in the intervening period between the time when the comparator’s work was done and when the work of the party to the taxation was done. If, however, the suggestion that a similar approach as was taken in the Missford case should inform the approach to be adopted by the Taxing Master means that it is open to the Taxing Master to apply an across-the-board reduction to the fees charged in the bill of costs, in my view, that approach is not permissible, as was recognised by the Court of Appeal.

105. The second suggestion made by Kearns P. was the introduction of a practice whereby the Taxing Master, perhaps once a year, would seek the views of an economist whose report could inform him or her “of the extent of cuts in remuneration for professionals providing services across a range of different disciplines”. Kearns P. then stated (at p.43):

      “The conclusions might not bind the facts of every case, but they would constitute guidelines of which practitioners could be made aware prior to the commencement of the taxation process. A report of this nature, if commissioned say on a yearly basis could, in appropriate instances, also result in an uplift in fees where economic or financial changes so warrant it.”
Kearns P. then observed that neither side before the High Court voiced an objection to the Taxing Master seeking to avail of such advices. However, on the hearing of this appeal, both the defendant and the plaintiff expressed disapproval of such an approach. However, it was not commented on by the Law Society or the Bar Council. In my view, there is no legislative authority for adopting such an approach. Moreover, as a matter of probability, it would be more detrimental than valuable to the taxation process. Given that s.27 of the Act of 1995 stipulates a specific approach to the taxation of party and party costs, the rise and fall of remuneration of professionals outside the legal profession, due to changes in the economic conditions, seems to me to be of little relevance to such taxation. Accordingly, in my view, it is not an approach which should be implemented.

106. The position adopted by the Court of Appeal relating to the “economic downturn” issue has been outlined at some length earlier. It is worth noting that the analysis of the Court of Appeal on this issue was preceded by consideration of a ground of appeal which arose on the appeal from the High Court to the Court of Appeal, but does not arise on this appeal. That ground of appeal was based on the plaintiff’s assertion that the Taxing Master had failed to have adequate regard to the comparable cases, wherein the solicitor’s instructions fee was either agreed or measured. It was found in the judgment of the Court of Appeal (at para. 183) that no error had been committed by the Taxing Master in his analysis of the issue of comparators. This finding must be borne in mind in the discussion on the “economic downturn” issue. Moreover, the level of uncertainty as to whether there was a finding by the Court of Appeal that the Taxing Master had, in fact, erred in the methodology employed to deal with the economic downturn, as referred to earlier, has also to be borne in mind.

107. All of the parties have adopted a sensible approach in relation to Question (4) as to the relevance of general economic conditions.

108. The defendant’s position is that it is relevant, but it should be taken into account in a general way, as a factor to be weighed in the mix when assessing professional charges, but emphasising that the nature and extent of the work actually carried out by the solicitor must remain the primary consideration.

109. The plaintiff has expressed agreement with the observations of Kearns P. in his judgment advocating a “realistic and proportionate readjustment to the expectations which might have been the norm before the financial difficulties began”, and his conclusion, quoted earlier, that this could only be done “with some measure of precision which would satisfy practitioners, perhaps the public also, and most importantly, serve the interests of justice and transparency”. It is emphasised by the plaintiff that, in order for the “measure of precision” to be achieved, the findings of the Taxing Master must be informed by appropriate evidence, including, where necessary, expert evidence. The point is made, however, by the plaintiff, that there was no evidence available to the Taxing Master on which he could have formed a view that a deduction should be made to reflect the economic downturn or the extent of any such deduction, or the extent to which the economic downturn had already affected lawyers’ fees. It is suggested that the interests of justice, and the transparency identified by Kearns P., require that each party’s economic evidence be adduced before the Taxing Master, where it may be tested, the crucial factor being, it is suggested, that where it is argued that a fee charged, for example, the solicitor’s instructions fee, be reduced because of the economic downturn, the Taxing Master may only act upon evidence of the precise deduction to be made.

110. The position of the Law Society is that general economic factors have a role to play in the proper taxation of costs in the exercise by the Taxing Master of his or her discretion. While recognising that the litigation in issue on this appeal arose at an earlier time, it is suggested, adopting a comforting positive view of the current situation, that to speak of an “economic downturn” at this remove is not necessarily appropriate, and that what was the “exceptional” and “unprecedented” economic crisis which the State endured should not set the bar for taxation of costs going forward.

111. The Bar Council accepts that legal principles applicable to taxation of costs, including those derived from s.27 of the Act of 1995, envisage the economic state of the country having a bearing on the taxation of costs. However, it questions whether the Court of Appeal identified the correct mechanism for the Taxing Master to employ in factoring in the economic climate. In particular, it is emphasised that counsel’s fees are not charged on the basis of an hourly rate, so that reductions to which counsel’s fees are subjected would be more based on value judgment than on precise calculations. It is also submitted that such a reduction in fees, in the absence of appropriate economic evidence, and a reasoned transparent decision of the Taxing Master, would introduce an unwelcome level of uncertainty to the taxation process.

112. The answer to Question (4) turns on identifying and applying the appropriate principles applicable to the Taxing Master’s function in taxing costs on a party and party basis, being the principles set out in s.27 of the Act of 1995, the relevant rules applicable under Order 99 of the Rules, and the jurisprudence that has developed over the years. The fundamental principle applicable since the coming into operation of the Act of 1995 is that the Taxing Master’s function on taxation is to examine the “nature and extent” of the work done by the professional, be he or she a solicitor or counsel, and to determine the value of such work. Further, in so doing, in allowing or disallowing costs included in the bill of costs, the Taxing Master must exercise his or her discretion in a fair and reasonable manner. It seems to me that in this context the word “value” in s.27(1) must have its ordinary meaning, namely, material or monetary worth, that is to say, the worth of the work done.

113. While it may not be usual to think of the process of ascribing worth to work carried out by a solicitor for one party to litigation, for the costs of which the other party is liable in consequence of the court having made an order for costs against the other party, as involving concepts in relation to “the market”, or “market conditions”, using those terms colloquially, to do so, in my view, does assist. For instance, the concept of “market value”, in this context, meaning the amount for which the service to be provided to the client by the solicitor can be sold in the solicitor’s professional market, or, in other words, the amount the solicitor can charge, must be a relevant circumstance to the determination of the value of the work. So also, in this context, must be the concept of “market condition”, meaning the state, at a particular time, of the solicitor’s professional market, and the consequential impact on market value, due to economic conditions, in other words, whether it is, in common parlance, a period of “boom” or “bust”.

114. Using more usual terminology, as the parties recognise, if due to economic circumstances, in general, a solicitor who provides the type of service in issue in the taxation process would, at the time the service is provided, assuming it is provided during the economic downturn, be paid less for such service than was the case before the economic downturn, that is a circumstance which is relevant to the taxation of the costs in issue. That factor may arise in the taxation process in different ways. To take the most obvious example, the party whose costs are being taxed, in relation to the solicitor’s instructions fee, may seek to rely on a comparator which was the subject of a decision of the High Court on a review in respect of an action which was conducted during the “boom”, whereas, the action the subject of the taxation was conducted after the “bust”. In those circumstances, in assessing the value of the work the subject of the taxation, the Taxing Master must have regard to the changed economic circumstances between the period of the conduct of the comparator case and the period of the conduct of the case the subject of the taxation, to the extent that the changed economic circumstances have resulted in a change to the value of the work done, which is what is being determined. In other words, the value of the work done by the solicitor whose costs are being taxed on the basis of its nature and extent remains the primary consideration. However, in determining that value by reference to the period during which the work was done, regard must be had to the market conditions at that time, and to the market value of the work, in the colloquial sense, referred to earlier.

115. Insofar as it is necessary in the course of the taxation process, to resolve a dispute as to the value of the work done by a solicitor or by counsel, which dispute centres on controversy as to the impact of a change in the economic climate on the market value of the work at the particular time it was done, such dispute can only be resolved by reference to appropriate evidence. Such evidence should focus on the impact of the change in the economic climate on the market value, as explained earlier, of the work done by the solicitor or counsel, so that the Taxing Master is in a position to determine the value of the work in issue at the particular time it was done. It would not be appropriate to be prescriptive as to the nature of the evidence which would have to be adduced. However, by way of general observation, one would expect that the relevant professionals, solicitors, barristers, and legal costs accountants, would be in a position to furnish the appropriate evidence, they being the persons most likely to testify as to the amount lawyers are charging in the relevant market, and what costs are being awarded or agreed in contentious matters and litigation. As the “market” should reflect the state of the economy, the evidence of an economist is unlikely to be of any relevance and it is likely to be misleading if it extends to broader issues than the relevant issues. The Taxing Master should, of course, be acutely aware of developments in the market, as his or her role is to put value on the work done.

116. In summary, the answer to Question (4) is that economic conditions are relevant. The impact of a change in economic conditions is to be assessed by reference to appropriate evidence.

General Observations
117. Before summarising the conclusions reached earlier and the answers to the questions before the Court, it is pertinent to make some general observations.

118. In the context of the discussion on the undisputed lack of reality of the costs ascribed to the costed items in Appendix W, I observed that the amendment of Order 99 and, in particular, Appendix W, is long overdue. Moreover, that is not the only outdated aspect of the Rules, as reflected in Appendix W. It is not satisfactory that the paying party who receives a bill of costs, in relation to the largest charge in the bill, the solicitor’s instructions fee, is presented with pages and pages of narrative, at the end of which is a single omnibus charge for all of the work as set out. It is because of the obvious deficiencies in the current process that all those involved in the taxation in this case, and in the subsequent review process in the courts, have had to put such effort into their involvement, with a view to producing a system which is more scientific, rigorous and, ultimately, better value for money. However, it is for the legislature to produce such a system.

119. Until such a system is enacted and brought into force, the legal professions should endeavour to present bills of costs with supporting evidence which are of greater assistance to the Taxing Master than is prescribed in Order 99 in its existing form. While the issue of comparators, which did arise on the appeal to the Court of Appeal, does not arise in this appeal, I think it is appropriate to observe obiter that, if used properly, the likelihood is that comparators are a valuable guide to the assessment of a fee. While the substance of the fee to be assessed in one case may be different from that in another, the comparison of the two is possible, and that can lead to adjustments for alterations which have occurred in practice and law and in the market as between the respective positions of the comparator and the parties in the case under consideration. At a minimum such an exercise is a useful “sense check” and may be more easily and cheaply carried out than, say, an in-depth analysis of timesheets and such like.

120. In a number of decisions, such as the Superquinn case referred to earlier in a different context (at para. 98), it has been said that the Taxing Master, as part of his function, is obliged to carry out a “root and branch examination of the bill”, as presented on behalf of the moving party. This and a number of similar statements which later followed should not be misunderstood. It was never the intention of the court that such would involve the Taxing Master in conducting some sort of inquisitorial review of every item in every bill, calling for his or her adjudication. Rather, the phrase was intended to apply only to those contentious aspects of the bill, as determined by the parties to the review. Where, therefore, there are only a limited number of items in dispute, the requirement of such an analysis should be confined to such items and should not extend further or beyond those in respect of which controversy has been raised.

121. Finally, having a process by which disputed costs can be adjudicated upon by an independent third party is an indispensable part of the justice system. The costs in themselves however, are always subsidiary and ancillary to the substantive proceedings. As such therefore, there should be a cost effective and time efficient way in which such a process can be both conducted and concluded. It is, therefore, a matter of some concern to note that in this particular case, even discounting any judicial involvement, both the taxation and the review were at hearing for a total of seven days. When one considers the documentation which obviously was also generated, it seems as if the process itself could almost rival the substantive hearing. This should not be the case and is incompatible with what should be the true nature of this particular adjudicative process.

Summary of Conclusions and Answers to Questions
122. It has been determined earlier that, in assessing the general instructions fee, the manner in which a Taxing Master should properly ascertain the nature and extent of the work done by a solicitor, and exercise his discretion in allowing or disallowing the fee claimed in the solicitor’s bill of costs, is as set out in the judgment of Herbert J. in the C.D. case, as quoted earlier, and not as directed by the Court of Appeal in its judgment. The methodology which the Court of Appeal directed should be adopted by the Taxing Master in assessing the general instructions fee in its judgment, particularly in paragraphs 57(1), 94, and 126, is not the correct methodology. In particular, the Taxing Master does not have to value each of the individual items making up the general instructions fee.

123. There is no requirement in law that a solicitor or a barrister keep contemporaneous records of time spent on a case, but bearing in mind that the Taxing Master has to ascertain the nature and extent of the work done by a solicitor or a barrister on a case, and put a value on that work, it may, in certain circumstances, be prudent for the solicitor or the barrister to keep contemporaneous time records with a view to assisting the Taxing Master in that task, if taxation of the costs arises. The Court of Appeal erred in finding, by implication, that such a requirement exists.

124. The bill of costs presented by the plaintiff in this case, as regards form and content, was not inconsistent with the requirements of Order 99 of the Rules. The Court of Appeal erred in finding that the Taxing Master erred in failing to direct the plaintiff to submit a fresh bill of costs to the Taxing Master.

125. The answers to the questions identified by this Court are as follows:

      (1) As a general proposition, the amount of time actually spent on a case should not be elevated above the relevant criteria mandated by Order 99, rule 37(22).

      (2) The Taxing Master has power to allow, or direct, the production of retrospective reconstruction of time spent. Such power is a discretionary power, which should be exercised having regard to all the relevant circumstances, including the factors suggested earlier in this judgment (at para. 90).

      (3) It is within the discretion of the Taxing Master to disallow the costs of two solicitors dealing with part of a case. That discretion should be exercised by the Taxing Master in a manner which enables him to perform the function conferred on him by s.27 of the Act of 1995, and Order 99 of the Rules, as he is required by law to do, and he must do so in a manner which he considers to be fair and reasonable.

      (4) General economic conditions are relevant to the proper assessment of a solicitor’s general instructions fee, or a barrister’s brief fee. The impact of a change in the economic climate on such fees is to be assessed by reference to appropriate evidence.


Implications of Conclusions and Answers to Questions for the Parties
126. Having regard to the conclusion reached in relation to the “two senior solicitors” issue, as set out above, I consider that the matter should be remitted to the Taxing Master to reassess the court attendance element of the general instructions fee, in accordance with the principles outlined earlier.

127. It is not possible to predict what will be the outcome of the revised assessment of the court attendance element of the general instructions fee on the difference between the total reassessed allowance for the year 2011, and the amount claimed in respect of that period by the plaintiff. The difference which existed following the review and the making of the second ruling by the Taxing Master was considerable. Because of the overall treatment by the Taxing Master of the amount claimed by the plaintiff for that period, and the inability to assess the extent to which he reduced the recorded hours, as distinct from the estimated hours, and how he concluded that the value of the work done for 2011 was only 64% of the fee suggested by the plaintiff for that period, it is difficult to conclude that he acted in a fair and reasonable manner. Accordingly, as the matter has to be remitted, in any event, to reassess the court attendance element, having regard to all of the circumstances, it seems to me that it is appropriate to direct that the allowance due for the year 2011 also be reassessed. I would also direct that the plaintiff be permitted to lodge a retrospective time reconstruction for the period from 1st January, 2011 to the commencement of the time records, because of the obvious difficulty which the Taxing Master encountered in having to assess the value of the work done for the 2011 period, by reference to both estimated and recorded time.

128. For the reasons outlined earlier, I have not found it possible to agree with the conclusion of the Court of Appeal that there was a significant error on the part of the Taxing Master in relation to retrospective reconstruction, in general, in this case. After consideration of the position adopted by the Taxing Master in relation to the earlier periods, in particular, the 2009 period, which is set out in some detail earlier, I do not think that the Taxing Master erred in not allowing or seeking retrospective time reconstruction for the work done during the earlier years, and, even if he did, I do not think that resulted in an injustice to the plaintiff. After all, it was the plaintiff who was at fault in not producing a retrospective reconstruction of time when presenting the bill of costs. Aside from that, I have concluded (at para. 76) that it has not been demonstrated that the methodology adopted by the Taxing Master in respect of the 2008, 2009 and 2010 periods was not consistent with the proper approach, as outlined by Herbert J. in his judgment in the C.D. case. However, given the difficulties which have been encountered in assessing the overall general instructions fee at the earlier stages of this process, from a practical perspective, I consider that it would be prudent to remit the entire general instructions fee for reassessment. It will be for the Taxing Master, in exercise of his discretion, to determine whether to direct retrospective time reconstruction in respect of the 2008, 2009 and 2010 periods.

Order
129. Accordingly, there will be an order discharging the order of the Court of Appeal, and remitting the matter to the Taxing Master for a renewed assessment of the costs, on the terms provided in paragraphs 126 to 128 above.










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