HCPI804A/2003

HCPI 804/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO. 804 OF 2003

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TAXATION REVIEW

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INTRODUCTION

1.  This is a taxation review regarding Counsel fee.

BACKGROUND

2.  The Trial Judge succinctly summed up the background of the cases when he refused the application for split trial in his Ruling on 27 April 2006 herein.

“ 3. The plaintiff suffered from Post Partum Depression (with a history of suicidal attempt and suicidal thoughts) and was admitted to the Union Hospital on 8 October 2000. The Union Hospital was operated by the 1^st defendant. The plaintiff was put under the care of the 2^nd defendant.

4. Whilst in the Union Hospital, the plaintiff was not prevented from leaving the ward on the morning of 10 October.  The plaintiff went down to the podium of the hospital and jumped down from there.  As a result, she suffered serious injuries and was rendered paraplegic.

5. She now claims against both the defendants on the basis of their negligence.”

3.  The Plaintiff was at all times legally-aided from the commencement of these two proceedings. Parties went through 5 PTRs and then, 19 days of trial at Court in January 2008. They were adjourned part-heard to be resumed for 4 days from 27 May 2008.

4.  Before the resumption, on 23 May 2008, they reached a settlement in the sum of $11 m, inclusive of interest. Both Defendants further agreed to pay the Plaintiff’s costs and that the Plaintiff’s own costs were taxed in accordance with Legal Aid Regulations.

5. On 16 March 2009, the Plaintiff filed her Bill No. 1 against the 2^nd Defendant for its unsuccessful application for split trial. I dealt with it on 23 June 2009. There was no review.

6.  On 24 March 2009, the Plaintiff filed her Bill No. 2 for a total of about $11 m legal costs against both Defendants.  Parties appeared before me for a total of 5 days in September and October 2009 as well as January 2010.  After taxation, the Plaintiff and the Director of Legal Aid sought review of certain Counsel fees.  I heard the argument on 4 October 2010.  Mr. R. Leung of Counsel represented the Plaintiff.  Ms. C. Chan appeared for DLA.  Mr. Sean Frost, Law Costs Draftsman as well as Mr. Kan of Messrs. Richards Butler acted for the 1^st Defendant and, Ms. C. Yeung of Messrs. Mayer Brown JSM, for the 2^nd Defendant.  Having heard from the parties, I reserved my decision to be handed down.  I now do so.

DECISION

7.  Upon consideration of all the evidence, authorities and submissions from the parties, I have decided to refuse the Review.  Briefly, most of the documents and arguments put forward by Mr. Leung were canvassed and decided at the taxation.  Despite the eloquent arguments put forward by Counsel, I have not been persuaded to change any of my rulings.

GENERAL PRINCIPLES AND APPLICATION

8.  To decide on the Review, I remind myself of the following general principles relating to taxation of Counsel fee, as per paragraph 62/App/28 and 28A at p.1153-1154 of HKCP 2010.

“ PART III ~ FEES TO COUNSEL

General

……

(5) Every fee paid to counsel shall be allowed in full on taxation, unless the taxing master is satisfied that the same is excessive and unreasonable, in which event the taxing master shall exercise his discretion having regard to all the relevant circumstances and in particular to the matters set out in paragraph 1(2). They are:

(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, specialized knowledge and responsibility required of, and the time and labour expended by, counsel;

(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 counsel 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.”

“Note—In Re Greater Beijing Region Expressways Ltd (No. 4) (unrep. HCCW 399 of 1999) [2005] 2 H.K.C. 185, Barma J. held that with respect to counsel’s fees, the court should first consider whether it was ‘necessary or proper’ to involve counsel in the particular task. If the question was resolved in favour of the receiving party, the quantum of counsel’s fees should only be disturbed if they were excessive and unreasonable. It was not possible to equate the test to be applied to the taxation of counsel’s fees laid down in para.2(5) of Pt II of the First Sch. to O.62 to that applicable to party and party taxation under O.62, r.28(2). A more generous basis than party and party taxation should be applied to counsel’s fees, whatever the basis of taxation.”

9.  By applying the above principles to the present case, in particular the 7 factors (a) to (g), I took the following views.

(a) This is a complex case involving issues of law and factual argument, including the Plaintiff’s suicidal condition, the knowledge known to the Defendants, and the extent of duty of the Defendants towards the Plaintiff. The 2 Defendants were separately represented by 2 independent experienced legal teams, with Senior Counsel. They ran their defences differently. Amendments of pleadings and further discovery took place during mid-trial of the proceedings.

(b) Specialized skill in handing medical negligence case was required and demonstrated. Time and labour expanded by Counsel were intensive.

(c) Voluminous documents were involved, including witness statements, medical records, medical reports, expert reports and literatures.

(d) The accident happened 2 days after the admission of the Plaintiff with the 1^st Defendant.

(e) The Plaintiff was rendered paraplegic.

(f) The Plaintiff claimed for over $20 m damages.

(g) Assistance from Junior Counsel was obtained from the outset of the proceedings in 2003, including obtaining preliminary advice and drafting settling pleadings. The Senior Counsel was brought into the picture in the middle of the proceedings. Both Counsel were relied heavily throughout the proceedings as from time to time, including meeting witnesses, meeting experts, advising during conference and in writing.

10.  With the above, I now deal with the various items of Counsel fees under review.  For convenience sake, I grouped them under 7 headings.

(1) Counsel fees for meeting witnesses before trial (items 947 and 948)

11.  After the last PTR on 9 November 2007, Counsel worked intensively to prepare for the trial scheduled to commence from 7 January 2008.  Among others, they met 2 witnesses, the husband and the sister-in-law on 20 and 21 December 2007.  Senior Counsel asked for $128,000 and Junior Counsel, $58,500.  Their respective fee notes stated:

“ 20.12.07	……	……
	Consultation all day with Wong Po Ming, Plaintiff’s 1st Witness (6 hrs), followed by Consultation Note, 6 pages (2 hrs), all day engaged.	$64,000
21.12.07	Consultation all day with Wong Chor Kwan, Plaintiff’s 2nd Witness (7 hrs), followed by Consultation Note 4 pages (1 hr).	$64,000     ”

“ 20.12.07	Conference with Wong Po Ming, Plaintiff’s 1st Witnesses, and Instructing Solicitors	) ) 6 hrs.	$27,000.00
21.12.07	Conference with Wong Chor Kwan, Plaintiff’s 2nd Witnesses, and Instructing Solicitors	) ) 7 hrs.	$31,500.00 ”

On these 2 occasions, the Solicitor also charged a total of $52,000.

12.  While agreeing that all 3 fee earners were entitled to meet the witnesses before trial, I took that one day for 6 hours ought to be good enough under part-and-party basis, roughly, 4 hours for the husband and 2 hours for the sister-in-law.  In so ruling, I noted that their witness statements had been finalized in April 2005.  They were about 18 pages and 5 pages respectively.  After the meeting, detailed consultation notes were prepared by Senior Counsel, but no supplemental witness statement was adduced.

13.  Hence, I allowed all the fees for both Counsel and the Solicitors on 20 December 2007 to be borne by the Defendants.  Regarding those on 21 December 2007, I transferred them to the common fund.  The Plaintiff tried to argue otherwise, relying on, inter alia, the actual time spent in cross-examination at trial took days.  However, as pointed out by the Defendants, though the 2 witness eventually sat in the witness box for quite some days, it was not anticipated originally.  Indeed, parties estimated 1.5 days and 0.5 day respectively would be sufficient.  Further, I also noted that some time was spent because of the sister-in-law, having eye-witness the Plaintiff to jump, was badly upset and required careful handling.

(2) Counsel’s fees for attending the Plaintiff’s home and the Hospital (Item 1000 & 1001)

14.  Counsel continued to prepare for the trial.  On 26 December 2007, the full team met the husband again for 2.5 hours.  I allowed them in full.  They then went to pay site visits to the Plaintiff’s home (she attempted suicide on 8 October 2000) and the Hospital (where the Plaintiff jumped).  Having allowed the site visit paid by the Solicitors, including taking photos, I took the view that the Defendants should not be required to bear further Counsel fees.  I also transferred them to the common fund.

15.  At the Review, it was argued that, among others, Counsel should not be deprived of seeing the scenes.  I respectfully disagreed.  It has never been my intention.  My ruling meant nothing none than that the site visit by Counsel went beyond party-and-party costs.  As contained in paragraph 62/App/6 at p.1149 of HKCP 2010,

“On a taxation of such a basis there shall be allowed all such costs as were necessary or proper for the attainment of justice or for enforcing or defending the rights of the party whose costs are being taxed. Unless the order specifies taxation on some other basis the costs must be taxed on the party and party basis. The costs chargeable under a taxation between party and party are all that are necessary or proper to enable the adverse party to conduct the litigation, and no more. Any charges merely for conducting litigation more conveniently may be called luxuries, and must be paid by the party incurring them (Smith v Buller (1875) L.R. 19 E.Q. 475).”

16.  As such, I stick to my ruling at taxation.

(3) Brief fee of both the Senior and Junior Counsel (Items 1094 and 1096)

17.  Counsel charged their respective brief fee at $570,000 ($500,000 + $70,000) and $350,000.  In dealing with them, I could locate useful assistance at paragraph 62/App/31 at p.1154-1155 in HKCP 2010.

“Brief fee—A proper measure for counsel’s fees was to estimate what fee a hypothetical counsel, capable of conducting the case effectively, but unable or unwilling to insist on the high fees sometimes demanded by counsel of pre-eminent reputation, would be content to take on the brief; but there was no precise standard of measurement, and the taxing master or the judge must, using their knowledge and experience, determine what was the proper figure (Simpsons Motor Sales (London) Ltd v. Hendon Borough Council [1965] 1 W.L.R. 112; [1964] 3 All E.R. 833, per Pennycuick J.).

It was not a sound principle on party and party taxation to treat the fee paid by the other party as a yardstick (Simpsons Motor Sales (London) Ltd v. Hendon Borough Council (above) adopted in Ngan Wun Yeung v. Lok Sin Tong Benevolent Society, Kowloon & Others [2000] 2 H.K.C. 404. Cf. Lord High Chancellor v. Wright [1993] 4 All E.R. 74 (a criminal legal aid case), where the Queen’s Bench Division approved the practice of first assessing counsel’s fees and then having regard to the amount paid to the opposing counsel before coming to a final conclusion; distinguished and not followed in The Lok Sin Tong case).

In assessing counsel’s fee it is always relevant to take into account what work the fee, together with any refreshers, has to cover. The brief fee covers all the work done by way of preparation for representation at the trial and attendance on the first day of the trial: Loveday v. Renton (No. 2) [1992] 3 All E.R. 184, per Hobhouse J., followed in Yeung Shu & Another v. Alfred Lam & Co. (a firm) & Chang Pao Ching (third party) [2000] 1 H.K.L.R.D. 231, CA).

Preparation by counsel of his examinations-in-chief and cross-examinations and of his final submissions is an ordinary part of his conduct of a trial on behalf of his client being all part of the work which counsel accepts an obligation to perform by accepting the brief and for which he is remunerated by the brief and the refreshers. They also cover:

(a) Preparation work before the delivery of the brief on the faith of a solicitor’s statement that it will be delivered;

(b) Preparatory work in counsel satisfying himself that he should accept the brief;

(c) Evening preparation;

(d) Any consultation between members of the team of counsel;

(e) Advising experts at weekends;

(f) Conferring with experts without separate instructions;

(g) Lost opportunities;

(h) Chronologies, etc.;

(i) Skeleton arguments;

(j) Dramatis personae;

(k) Opportunities to prepare further when the court is not sitting;

(l) Preparation of draft terms of collateral agreements.

(See Loveday v. Renton (No. 2) (above))

Counsel is not normally entitled to be remunerated separately for necessary work which is an incident of the proper representation o the client; rather, in a privately funded case a barrister must negotiate a brief fee sufficient to cover such work while in legal aid work the barrister may, on the legal aid taxation, require that the brief fee and the refresher rate properly reflect the amount of work that actually had to be done (Din (Tai) v. Wandsworth LBC (No. 3) [1983] 1 W.L.R. 1171; Loveday v. Renton (No. 2) (above).

What was necessary and incidental to the preparation for representation at trial, and hence not chargeable separately, depended on the circumstances of the case. Where counsel was duly instructed to perform other work, in other words, work which was quite separate from the preparation for representation at trial and which was ‘necessary or proper’ within the meaning of O.62, r.28(2), such work could be claimed as a separate and discrete item of costs. Counsel’s fees were plainly separate and discrete from the brief fee when they involved work done many months before the trial of the preliminary issue and the full trial. At that stage, it would not have been clear whether the matter was to go to trial at all. Such work, if properly done at an early stage was important for establishing the future decision and conduct of the case for the benefit of the party concerned. It was therefore quite necessary or proper to instruct Counsel to advise at that stage and for a properly itemized fee note to be presented for such work. (Yeung Shu & Another v. Alfred Lam & Co. (a firm) and Chang Pao Ching (above)).”

18.  By applying these principles, I noted the followings.

(a) Junior Counsel’s assistance was brought from the commencement of the proceedings, Senior Counsel, in the middle of the same.

(b) Their assistance were indeed intensive and extensive in all aspects of the proceedings, including pleadings, quantum of damages, discovery, witness statements, expert evidence, attending PTRs and advices as well as joint conferences from time to time.

(c) Before the delivery of the brief, both Counsel had incurred quite some fees, $550,000 for the Senior Counsel, and over $360,000, for the Junior Counsel.

(d) Both Counsel did not levy their brief fee in the way as contained in the said paragraph/App/31. They indeed charged individual items for quite some preparation for the trial, including reviewing documents, meeting witnesses and experts. Senior Counsel charged $384,000 and the Junior, $155,250.

(e) There was division of work between the Senior and Junior Counsel, in handling argument on law, facts and examination of witnesses.

19.  With the above in mind, and upon perusal of all the chronologies, skeletons, authorities, and so forth prepared by Counsel for all the parties, I allowed the brief fee at $406,000 and $225,000.

	Senior Counsel	Junior Counsel
Research/Authorities	5 hours	5 hours
Preparation for Examination of Witnesses	10 hours	10 hours
Drafting Opening Submission	5 hours	10 hours
Reading Opening, documents and Authorities prepared by Defendants’ Counsel	10 hours	20 hours
Internal Discussion	3 hours	3 hours
Preparation for 1st day trial	2 hours	2 hours
Hearing at 1st day trial	5 hours	5 hours
	42 hours	50 hours
	x $8,000	x $4,500
	$336,000	$225,000
	+ $70,000
	$406,000

20.  At the Review, Mr. Leung drew my particular attention to a number of notes prepared by Senior Counsel for cross-examination of the Defendant’s witnesses.  They were detailed notes setting out lines of cross-examination for several witnesses with specific questions written down.  Having carefully re-considered the matter, as a whole, under party-and-party taxation, I remained of the view that the preparation for examination of witness should take about 2 days work or 10 hours.  It was reasonable time in light of the expertise of the Senior Counsel.  Mr. Leung also took me through the Summary of Literature prepared by him for the experts.  It was a succinct summary of the textbooks and materials referred to by the experts in their reports.  Such summary was however not deployed at the trial.  It was only kept within the Plaintiff’s team.  Such work done was impressive, but was persuasive enough for me to change my assessment on the brief fee.

(4) All Refreshers for both the Senior and Junior Counsel

21.  The estimated length of trial was 16 days.  There were 14 factual witnesses, 2 for the Plaintiff, 11 for the 1^st Defendant and the 2^nd Defendant himself.  There were 8 experts from both sides.  On top of the 5 hours’ court time each day, Counsel had to work in the evening.  Upon considering fees having been levied, including the preparation and brief, I allowed 2 extra hours on average on each day.  It would be reasonable throughout the whole trial.

22.  The hourly rates of both Counsel were allowed at $8,000 and $4,500.  By applying 7 hours per day, I allowed their respective refreshers at $56,000 and $31,500.  Maybe, sometimes Counsel would be paid “less” if the Court sat longer than 5 hours and more than 2 hours preparation was required.  However, as the trial would took place for a period of time, Counsel might also be paid “more” if the hearing lasted only 2 to 3 hours on a particular day or indeed, no particular evening work was needed.  On average, 7 hours was indeed reasonable in the circumstances. 

(5) Counsel fees for advising an offer (Item 1175 and 1176)

23.  On 31 January 2008, the trial was adjourned part-heard for about 4 months to 27 May 2008.  During the adjournment, the Defendants put forward without prejudice offer to the Plaintiff.  Both Counsel were asked to advise on the same.  They charged for $240,000 and $70,000 respectively for a letter of advice for 4 pages.

“ 10 to 16.4.08

Considering without prejudice offer of Defendant’s in the sum of $7 million inclusive of interest and costs.  12th April 2008, considering legal and factual problems of case in depth and 14th and 16th April 2008, Letter of Advice, 4 pages, in consultation with Raymond Leung, Junior Counsel, total time about 3 days engaged, charged as refreshers.

$240,000”

“ 11.04.08 -    16.04.08

Perusal of typed notes off proceeding, considering WP offer under cover of Ds’ letter dd. 10.04.08, consultation with Mr. Ruy Barretto, S.C. & Fax Advice dd. 16.04.08

) ) ) ) 2 days

$70,000.00”

24.  I reminded myself that, by that time, both Counsel had been handling the matter for quite some time, including rendering advice on liability and quantum as well as the 19 days at trial.  Time was needed for them to review the development and revise the quantum for the purpose of settlement.  2 refreshers or 14 hours of work would be reasonable in the circumstances.  I so allowed accordingly. 

(6) Counsel fees for resumed trial (Item 1177, 1178 and 1179)

25.  Parties only settled the cases 3 days before the resumed trial.  To equip them for the resumed trial to finish its remaining witness for the 1^st Defendant, both the Senior and Junior Counsel spent 8 and 5 days respectively for preparation.  They therefore asked for $640,000 and $175,000 respectively.

“ 6.5.08	Receipt of instructions to proceed with preparation for resumption of trial in absence of response from Defendants.
7.5.08	Considering letter from Director of Legal Aid 30th April 2008 and consultation with Junior Counsel Preparation for resumption of case, reading previous papers, opening, advice, pleadings, in total 1 day engaged
12.5.08	Reading and noting Witness Statement Bundle with Notes on Cross examination of 8 Defendant witnesses. Further work on cross-examination of Dr Anthony Lee and contradictions on suicide precautions, all day engaged.
14, 15, and      16.5.08	Reading and updating notes with reference to Witness Statements and notes of evidence and transcript. Work on Notes on different Suicide Precautions at each handover, and shift and Nurse, with references to duties per Dr Anthony Lee 9 pages, about 2.5 days engaged.
16, 17 and      19.5.08	Note on Causation and Consequences and the Crux of the case on no suicide precautions order and Other issues, 9 pages. Various notes and considering new House of Lords authority, over 2.5 days engaged.
19 & 20.5.08	Reading typed transcript evidence of case, over 300 pages and annotations together with notes and Documents bundle, 1 day engaged. Totally about 8 days engaged, charged as refreshers.	$640,000”

“ 06.05.08	Receipt of instruction to proceed with further preparation	) ) ) )
07.05.08 –    10.05.08	Further perusal of notes of proceeding, considering letter from DLA & consultation with Mr. Ruy Barretto, S.C. (inclusive of reading previous papers, opening, advices, pleadings & witness statements) & further preparation for cross-examination on the remaining nurses with reference to the oral evidence thus far	) ) ) ) ) ) ) 4 days	$140,000.00
20.05.08	Further preparation for cross-examination Consultation with Mr. Ruy Barretto, S.C. Perusal of notes on Plaintiff’s case revised by Mr. Ruy Barretto, S.C.	) ) ) ) 1 day	$35,000.00”

26.  I took the view that, in light of the substantial involvement and expertise of both Counsel, 2 refreshers or a total of 14 hours would be sufficient to them to pick up the resumed hearing.

(7) Taxation costs (Item 1211)

27.  At the end of the taxation, upon hearing from the parties I allowed the taxation costs under party-and-party column at $64,400.

	$
(a) (i) Preparation of taxation bundles
(10 hours x $1,600 LCD + 2 hours x $4,000 Solicitors)	24,000
(ii) Preparation for hearings
(4 hours x $1,600 LCD + 3 hours x $4,000 Solicitors)	18,400
(b) Attending taxation
(14 hours x $1,600 LCD + 10.5 hours x $4,000 Solicitors)	64,400

28.  One day after the conclusion of the taxation, the Plaintiff’s solicitors wrote to me informing his omission to bring to my attention the fee for Senior Counsel’s fees of the sum of $134,000 for assisting in taxation.  Upon considering parties’ submissions in writing, I directed that:

“A hypothetical approach is to be adopted, namely, either the Senior or Junior Counsel will spend 3 hours, at the hourly rate of $4,000, preparing a note explaining to the Court the special features of the present case, the task undertaken by them and the way that Counsel levied their fees, in particular the Brief, the Refreshers and the rending of advice.

Hence, a further sum of $12,000 will be added to item 1211(a) of the disbursement column under party-and-party taxation at p.283 of the Bill.”

29.  Taxation is usually handled by LCDs at $1,600 per hour.  They draft the bill, prepare the bundles and conduct the taxation.  Solicitor sometimes will be allowed to attend the taxation to explain and argue on law point.  They will then be allowed to earn their usual hourly rate as in the capacity as a solicitor.  If a solicitor will choose to draft the bill or conduct the taxation when a LCD should have been asked, he or she will only be remunerated at $1,600 per hour.  Counsel’s assistance in taxation is indeed very rare and requires very good justification.

30.  While appreciating the detailed tables and submissions prepared by both the Senior and Junior Counsel to assist me, with respect, I did consider them very “luxury” indeed.  These documents could have been prepared by a solicitor.  Further, they should not go to the extent of 44 pages.  By adopting a hypothetical approach, $12,000 was further allowed (3 hours x $4,000 Solicitor).  In my view, it was the reasonable sum to be awarded.

Costs

31.  I see no reason why costs should not follow the event.  There will be an order nisi that the Defendants’ costs in the Review, including all costs reserved, shall be borne by the Plaintiff and the Director of Legal Aid, to be taxed by me (1 hour reserved) if parties cannot agree on the same within 21 days from the date hereof.  The Plaintiff’s own costs are taxed in accordance of Legal Aid Regulations.