XCHRX CHENG MA CHOI v. TAI FONG TEXTILE FINISHING WORK LTD.

1995, No. PI-563

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES LIST NO. PI-563 OF 1995

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J U D G M E N T

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1. This is an application for a Review of Master Kwan's decisions on the taxation of the Plaintiff's bill of costs in this action. All the items concerned relate to Counsel's fees disallowed or substantially reduced. Following her original decision the Learned Master was asked for a Review and gave her reasons on the 14th December 1998, and supplemental reasons in respect of other items, following a request from the Plaintiff's solicitors which related to items over which there had been argument on an earlier occasion.

2. Before I set out the position and my decision in relation to each item, it is necessary to state shortly the nature of this personal injury action. The Plaintiff suffered catastrophic injuries when he was injured by a textile machine in the course of his employment. Liability appears to have been by no means clear cut. Contributory negligence was regarded as a live issue. Settlement was achieved shortly before the Pre-trial Review in April 1997. The accident had occurred in March 1993. Proceedings were commenced in May 1994. On the basis of full liability his claim was valued between $11m. and $18m. depending on a number of factors. The amount of damages finally accepted was $7m. This itself indicates the problems in the case. Counsel instructed was a very experienced junior who took silk in early 1997 shortly before the settlement. Simply as a statement of fact, and not to excite comment, counsel was instructed on no less than twenty occasions to settle documents, advise and have conferences. The solicitor who had conduct of the Plaintiff's case was experienced with approximately twelve years of post-qualification practice.

3. The order for costs, by agreement on the settlement, was party and party costs, the criterion therefore being on taxation, "all such costs as were necessary or proper for the attainment of justice etc." as provided by Order 62 r. 28(2).

4. On the taxation the Master was given the explanation that it was necessary for Counsel to see the Plaintiff in his then environment to give assistance in the drafting of the Statement of Claim. Before me Mr. Andrew Cheung argued that it was a necessary conference to deal with all issues in the case and that in any event a conference dealing with all such issues would have been necessary at some later stage.

5. The Master had allowed the solicitor's charge at $12,000 taking the view that it was sufficient for the experienced Solicitor, who had dealt with the Employee's Compensation proceedings, to have attended and then provided Counsel with appropriate instructions. I agree entirely. To my mind it was quite unnecessary for Counsel to have been instructed to attend a conference with the Plaintiff in those circumstances, and a competent experienced solicitor is expected to be able to meet any requirement at that stage. Accordingly I approve the Master's decision and that item is disallowed.

6. However, there is one aspect which I should consider bearing in mind that this is a rehearing and I have a wide discretion to do what is fair and proper without ignoring the "necessary and proper" criterion. In a case of this size and complexity it is necessary and proper for counsel to have a conference with the Plaintiff at an appropriate stage; in fact I would go as far as saying that counsel ought to have such a conference, either at the Plaintiff's home or in Chambers. A Plaintiff such as this one, has a legitimate expectation that he would have such a conference at some time during the three year course of the proceedings.

7. This was not argued before the Master so she had no opportunity to deal with it. Mr. Cheung has raised it as an alternative to his main point. I invited Mr. Munro, himself an experienced solicitor in this field, to deal with the alternative. Quite properly and relevantly he replied that that was not the justification advanced hitherto and in any event could not relate to the specific item in the bill, but I infer that he would not have quarrelled with such an item had it appeared in the bill of costs at a different stage of events.

8. I also anticipate that Counsel concerned would probably have raised the argument that by reason of the pre-issue of proceedings conference, it was not necessary for her to see the Plaintiff again in the ordinary course of events, since that conference would have met any subsequent need. In these circumstances should I ignore altogether the "necessity and propriety" of a conference with counsel at some stage and adhere rigidly to the arguments and decision against this particular item? In view of my wide discretion and the need for fairness, it would be wrong to exclude a conference fee for counsel at some stage.

9. What then should be the fee? I do not think that five hours would have been necessary though I accept that it would probably have taken place where Counsel could see the existing and likely future environment. I think the proper fee would have been $15,000 and I substitute this for item 5 to represent a necessary and proper fee for a conference at some stage. Having taken this course should I also allow an appropriate fee for solicitor's attendance upon counsel at this notional conference? There was a generous allowance for the solicitor under item 5. Since it was a notional conference as far as the Solicitors were concerned it would not call for an allowance.

10. The Master was informed that it was necessary for Counsel to attend with the expert to understand how the accident occurred, because photographs were not adequate. She was informed that the expert report (of Dr. Sin) was not, in fact, relied upon. Counsel had had a conference with Dr. Sin on the 7th January 1995, about two weeks before the site visit. Counsel's and solicitors' fees for this had been charged to the Common Fund, not to the party and party section. The more detailed background to this aspect is that Dr. Sin turned out to be an expert in textiles but not a consulting engineer. It is incumbent upon litigation solicitors to ascertain who is an expert in a given field. It is quite a simple exercise involving amongst other things a consideration of experience and qualifications as well as reputation, and inquiry at the outset of the person concerned. Since his report was useless and his expertise in this field of machinery non-existent, this aspect was a waste of time. There was no need for Counsel to have a site visit with an engineer who could tell him nothing of value when in any event the decision in relation to such a visit should have awaited photographs and an authoritative and intelligible engineer's report. That eventually came in the shape of Dr. Greene's report in November 1995 which was an item allowed on a party and party basis. The Master decided on the information available, that Counsel's visit was not necessary. I agree. Therefore it remains disallowed. Given the error of judgment which resulted in Dr. Sin being instructed it would in my view be wrong for the Plaintiff to be charged for Counsel's fee which was unnecessarily incurred.

11. I note that Dr. Sin's fees (which cannot be justified) have been generously accepted by the Legal Aid Department as a Common Fund item.

12. The need for an application in view of the Defendant's attitude to the requested facility is not challenged. The affidavit was a simple matter, well within the competence of an experienced solicitor having the conduct of such litigation. It was quite unnecessary to obtain the services of Counsel for this. The comments I made under item 5 in relation to what is to be expected of an experienced competent solicitor in the conduct of such litigation are equally applicable here. It was a short and simple document. The Master disallowed the fee. She was right to do so.

13. The Learned Master allowed $2,000 on the basis that the matter was of sufficient importance to justify Counsel going over the papers before filing at Court. Her reasons suggested that she understood the fee to relate to counsel perusing an affidavit. In fact the fee was for counsel drafting the affidavit.

14. This was a quite uncomplicated document. It was well within the competence of an experienced solicitor handling such litigation. I would not have allowed any fee to counsel on that basis. In any event I would have regarded the "perusing" aspect for which $2,000 was allowed, as being included in Counsel's brief fee for appearing on the summonses. I note that Counsel's brief fee appears in the Common Fund column. The fact that it was not charged as a party and party item suggests that the Plaintiff's Solicitor regarded it as other than a "necessary and proper item". In that case the same approach should have been adopted in relation to the drafting of the affidavit. Although I am not asked to consider that item of Counsel's fee in the Common Fund column, I note that the Defendant's Solicitor conducted the application before Cheung, J. There is no reason why the Plaintiff's Solicitor should not have done likewise. It is probably a recognition of this that led to the acceptance that Counsel's fee could not be charged on a party and party basis. No application for a certificate for counsel was made. Again the Legal Aid Department has adopted a generous approach in not challenging this item.

15. I affirm the Master's reduction of the fee claimed.

16. It is important to bear in mind that this item was linked with Counsel's Advice on Quantum - they were settled on or about the same date and there is a clear overlap in content. The Advice is relatively short but predicated upon the draft schedule. There are in fact two schedules - the optimum (maximum) one for tactical purposes, and the "settlement" one. It is impossible to view the Advice and its draft schedule in isolation from the formal schedule and the Master's approach was the correct and practical one. The formal schedule was fine-tuned upwards from the draft with the Advice. Alternatively the latter was fine-tuned downwards. Whatever the position the formal schedule was an amplification to some extent of what had already been prepared and allowed for in item 224 (Advice on Quantum) which was reduced and is not the subject of this Review. Accordingly the Master's estimate was a correct one and the reduction appropriate. For future reference I would suggest that it is not appropriate to seek to charge on a party and party basis, one fee for a draft schedule incorporated in an Advice and another for the formal schedule to meet the requirements of personal injury litigation procedure, unless it is made unequivocally clear that one is not simply a regurgitation, with modifications, of the other which forms part of an Advice for which a separate fee is sought.

17. It is now accepted that this item cannot properly be charged on a party and party basis and that the Master was right to disallow it. The conference was brought about by the apparent desire of the Plaintiff to "renege" on the settlement to which he had agreed a few days earlier and which had been notified to the Defendant's solicitors. The fee now appears in the Common Fund column as an item to be charged against the Legal Aid Fund. Mr. Chan contests, on behalf of the Legal Aid Department, any such allowance.

18. He accepts as a charge the Solicitor's fee of $16,000, arguing, correctly in my view, that it was not necessary for Counsel (then Leading Counsel but still acting as junior counsel) to go and see the Plaintiff. Once again I have to stress the expectation that personal injury litigation has of competent experienced practitioners in its field. The Solicitor concerned had discussed and agreed settlement with the Plaintiff. She had subsequently confirmed it with the Defendant's solicitors. It could be regarded as an extravagance, an imprudent indulgence even, to incur the expense of a consultation with Counsel, after settlement had been agreed. Certainly it would not be right to do so without the concurrence of the Legal Aid Department. Practitioners have an obligation to act responsibly in relation to public funds. In such an important matter it would have been reasonable to delay the Pre-trial Review. It may be that when settlement was discussed with the Plaintiff and his agreement confirmed by telephone (the written agreement came after the consultation) it should have taken place face to face. This was a difficult and anxious matter for a badly injured Plaintiff. I seriously doubt the wisdom of telephonic contact at such a juncture in such a case. If the Plaintiff was a difficult one, unreasonably demanding Counsel's services, then he should have to pay for that luxury. I am by no means convinced that this was the case. It is not for me to judge. However the fee for Counsel is not a proper one to charge against the Legal Aid Fund.

19. The overall effect of my decision on Review is to confirm the Master's decisions. The allowance of a fee for a conference with Counsel is an incidental matter. The Plaintiff's application therefore, with one exception, is dismissed with costs to the Defendant. It is not appropriate to consider fractions of costs by reason of my decision on item 5. The Plaintiff's solicitors had not adopted before the Master the argument pursued here. Had they done so it may well have found favour.

The consequences.

20. I was assured at the outset by Mr. Cheung that whatever the result of this Review, there would be no burden on the Plaintiff in the form of a reduction of his damages. I am both relieved and heartened by such a professional approach.

21. Mr. Cheung went on to say, in the course of his submission, that Counsel would have no remedy where his or her fees were disallowed on taxation. Even if that were the case I could not allow it to influence my decisions. It must be remembered that counsel's fees are incurred by the solicitors who instruct them and there lies the primary and only responsibility. They must assure themselves that it is necessary and/or reasonable to instruct counsel at any particular stage and that the fees suggested are reasonable ones. Counsel cannot sue for his or her fees but solicitors are honour bound, as a matter of professional duty, to meet counsel's fees where there is no dispute between them as to the quality of professional service or reasonableness of amount. If the fee is agreed it is, 'ipso facto', reasonable as between counsel and solicitor. In many circumstances fees can be negotiated 'post facto' to achieve or maintain goodwill. It is not for me to question the reasonableness of counsel's fees, and do not do so save in one respect which I will deal with shortly. I have assumed the Plaintiff's solicitors have established this before, the commitment is made.

22. The one aspect of counsel's fees where there is food for thought concerns the fee for the post-settlement conference, in the context of the fee for the Pre-trial Review hearing. I am bound to say that the fee allowed for this hearing which took place four days after settlement was agreed, took me by surprise. In view of the settlement, the hearing could have been vacated. A consent judgment could have been entered. The fee for a visit to the Plaintiff could have been included in the brief fee. Counsel had advised on Quantum and settled the Revised Schedule only one week before. All these are factors which have some bearing on the reasonable level of fee for the last two instances of involvement of counsel and are matters which any prudent experienced solicitor should bear in mind when incurring costs.

23. Finally there is the question of what burden ultimately falls upon the Plaintiff as a consequence of the original taxation. If Mr. Cheung's assurance relates to all the items taxed down or taxed off then the only burden relates to any Common Fund items. If the assurance relates only to the costs of the Review (Plaintiff's and Defendant's) then the burden is extensive. All I am entitled to say is this. If the incurring of counsel's fees (and any of Dr. Sin's fees) was regarded as unnecessary - and both the Master and I think that was the case in respect of the items considered - then a lay client who has to rely upon his solicitor's judgment and professional concern to protect him from unnecessary financial burdens, is entitled to expect that he will not be presented with a bill in respect of such items at the end of the day.