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Disclosure of Retainer Documents - 1 

Dickinson -v- Rushmer (ChD NLJ 18.01.02)

This was an Appeal from the detailed assessment by a Costs Judge to Rimer J sitting with Assessors. On the detailed assessment the Paying Party (the Defendant) invoked the indemnity principle asserting that the Receiving Party (the Claimant) could not have assumed a personal responsibility to costs of the amount claimed in the Solicitor's bills. The Claimant's Solicitors produced to the Costs Judge documents to prove the terms of the retainer and demonstrate that there was no breach of the indemnity principle. The Costs Judge refused to allow the Defendant to see the documents on the grounds that they were privileged.

Held: the Costs Judge was wrong. It is one of the most basic principles of natural justice that each side is entitled to know what the other sides case is and to see the documentary material on which he was relying. The Claimant, without producing any documents could have asked the Costs Judge to direct whether he regarded the Defendant as having raised a genuine issue which needed to be met by evidence, or if he accepted the signification on the bill of costs that the indemnity principle had not been offended. Instead he had pre-empted any such decision by the Costs Judge by producing the documents which the Defendant was therefore entitled to see, even though they were privileged. 

Disclosure of Retainer Documents - 2

South Coast Shipping Company Limited -v- Havant Borough Council (ChD NLJ 18th January)
This was an Appeal from detailed assessment by a Costs Judge to Pumfrey J sitting without Assessors. The Appellant Local Authority (who were the Paying Party) alleged there was no retainer between the Receiving Party and their Solicitors and they Appealed against the decision of the Costs Judge that they had not rebutted the presumption that there had been an agreement to pay. The Costs Judge had been shown documents they had not been allowed to see on the grounds that they were privileged. The Appeal raised Human Rights issues, in particular the conflict between the right to privilege and the right to a fair trial. The Judge extracted the following guidance from CPR Rule 47, the Costs Practice Direction and the decided cases:-
the ordinary rules of natural justice applied to costs assessment hearings;
the question was what evidence could be adduced by the receiving party to establish a disputed fact;
where there was a disputed issue of fact to be decided, the receiving party could seek to rely upon a document otherwise privileged that had been filed in support of the bill;
furthermore, the costs judge could require the receiving party to produce to the costs judge any document which the costs judge might specify which he considered was necessary for him to reach a decision;
in either case, the costs judge had no power to order disclosure of a privileged document to the paying party, but he could put the receiving party to his election between (a) not relying upon the document and offering to prove the fact of which the document was evidence by some other means, and (b) showing it to the paying party;
the costs judge would exercise his discretion to put the receiving party to his election having regard to the requirements of fairness and justice, in particular, whether disclosure could be made to the party's legal representatives only, whether irrelevant privileged matter could be exercised, and the importance of the document in establishing the disputed fact; and
disclosure in the context of assessment proceedings of a document otherwise privileged would not be viewed as a waiver of the privilege, although a voluntary disclosure made relying upon that principle was capable of giving rise to serious difficulties: Burnes -v- Raychem [1999] 2 All ER 154.

If the Costs Judge, following the guidance in Pamplin -v- Express Newspapers Ltd [1985] 2 All ER 185 and Costs PD 40.14 and having seen the documents in question, required the Receiving Party to elect between giving secondary evidence of the retainer and waiving the privilege, there was no incompatibility with the principles articulated by the Convention. 

That was not intended to suggest that the Costs Judge should put the Receiving Party to its election in respect of every document relied on, regardless of its degree of relevance. In the great majority of cases the Paying Party would be content to agree that the Costs Judge alone should see privileged documents. Only where it was necessary and proportionate should the Receiving Party be put to its election. The redaction and production of privileged documents, or the adducing of further evidence, would lead to additional delay and increase costs.

Comment: Although both the above decisions referred to pre-CPR decisions, neither report made specific reference to Hazlett -v- Sefton Metropolitan Borough Council [2000] 2 All ER 887 which confirmed the presumption that a client would be liable to pay her Solicitor's costs and need only adduce evidence if a genuine issue was raised, such as the unlawfulness of the retainer or the un-enforceability of a CFA. What these two cases clearly establish is that the right of the Paying Party to see documents adduced in evidence over-rides their confidentiality. 

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