Why a litigant in person was worth £150 per hour

18th May 2017

Retail Financial Services Litigation specialist Rebecca Calland clarifies the court’s approach when calculating the value of work done by litigants in person.

The rules and a recent case

Part 46 of the Civil Procedure Rules (CPR) provides for an allowance of costs to be paid to a successful litigant in person.  CPR 46.5 allows a litigant in person to be paid costs for the same categories of work and disbursements which would have been allowed if the person had been legally represented.  The amount to be allowed to the litigant in person will either be £19 per hour [1] or, where the person can prove financial loss, the amount that he or she can prove to have been lost for time reasonably spent on doing the work.

In the recent case of Spencer and anor v Paul Jones Financial Services Ltd [2], a Master in the Senior Courts Costs Office allowed the rate of £150 per hour for a litigant in person whose claim against the defendant settled for £220,000.

The litigant in person was able to obtain an hourly rate that was significantly higher than the prescribed £19 because he presented his evidence with sufficient specificity to establish that level of financial loss.  To achieve this, he adduced company accounts to show that his business (a legal services company) had suffered a significant downturn during the period in which he was working on the case and that, at all other times, he had always worked at full capacity for the business.  Acknowledging, by reference to the evidence, that the litigant in person’s usual charge-out rate ranged between £150 and £165, the Master allowed the hourly rate of £150.

As an interesting aside, the Master also allowed the litigant in person to recover fees paid by him to his financial advisor in return for work done which quantified his loss for the purposes of the litigation.  This was despite the financial advisor not being a court-appointed expert and not producing a report for use in court, and despite a potential conflict of interest (as the advisor also managed the litigant in person’s investment portfolio).

The Master held that it is the nature and extent of an ‘expert’s’ interest in the case or party that determines whether he or she should be precluded from giving evidence.  In this case, the financial advisor had the relevant expertise and, had the matter not settled, the litigant in person would have been proceeding with evidence to which the court could attach less weight than had it been endorsed by an expert’s declaration of duty to the court.  On that basis, and because the defendant had not taken issue with the admissibility of the financial advisor’s evidence until the costs claim, the financial advisor’s fees were allowed.

Practical implications

The message for mutuals is clear.  While you may often face a litigation on the other side of a case, you should never underestimate them.

The litigant in person in this instance was a highly skilled individual who advanced a valid claim and achieved a good settlement.  Not only were his costs then allowed as the successful party, but they were assessed at a level far in excess of the prescribed £19 per hour because he was able to adduce evidence that those costs were reasonable.

On a practical level, the case provides helpful guidance as to the evidence that a litigant in person should be expected to provide if he or she is to prove financial loss in respect of a costs claim, and as to the approach that the court will take when a claim is made for non-expert specialist assistance.

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[1] as per CPR 46.5 (4) (b) and the relevant Practice Direction
[2] (unreported) 6 January 2017, Senior Courts Costs Office