Expert Witness Fees: Deutsche Bank AG v Sebastian Holdings
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Recovering Expert Witness Fee Costs
Expert witness fees are incurred when an expert, such as medical experts, provide evidence by way of a medico-legal report in the main action, and upon which the expert may be questioned as an expert witness in conference with Counsel or attending Court for Trial.
There are often disputes between parties in relation to expert witness fees, incurred, especially in privately funded cases, such as those where the receiving party seeks details as to the hourly rate charged by the expert, and upon which they seek assessment. This issue is not as common in cases that are subject to the fixed costs regime nor legal aid cases (funded by Legal Aid Agency) as these cases usually require permission before expert witnesses incur any fees. In low value personal injury litigation, many expert fees are fixed however, once an expert is instructed outside the field of GP/A&E or Orthopaedic experts, fees, including cancellation fees, can often become more complex and are not fixed, particularly when a medical agency is involved. This increases the likelihood of a dispute arising as to recovery of the full fee if inter-partes costs are payable.
Deutsche Bank AG v Sebastian Holdings Inc & Anor  EWHC B4 (Costs)
Deutsche Bank AG v Sebastian Holdings is a recent common law decision addressing the issue as to the approach in determining reasonable expert witness fees and the amount of detail required to be provided at assessment to assess the fees involved accurately.
Deutsche Bank AG was a case in which substantial costs were incurred following commercial litigation, where the Claimant obtained damages in the sum of £243m. The costs sought were in the total sum of £53m, of which £23m related to the Claimant’s expert accountant fees.
The Defendant’s submission was that they should not be held liable to pay the costs relating to the accountant’s fees as there was not enough information provided in order to explain how those fees had been calculated by the expert in question.
Master Gordon-Saker, Senior Costs Judge, held that the expert (in this case, accounting firm Deloitte) had no duty to record its time in a certain way, other than what was agreed between them and their client. Furthermore, the Master held that there was no duty on the Claimant to present the fees of their expert for assessment in any particular way, other than to fulfil their obligation under CPR47 PD 5.2(d) in providing written evidence in the form of invoices.
Master Gordon-Saker held the following:
- “CPR Practice Direction 47 provides guidance about the procedure for detailed assessment. Paragraphs 5.12 to 5.22 set out the requirements for the contents of a bill but relate largely to profit costs. There are no specific provisions as to the form or content of evidence in respect of disbursements apart from the requirement in paragraph 5.2(d) that written evidence must be served with the bill of any disbursement claimed, which exceeds £500.”
However, Master Gordon-Saker also went on to state that in certain cases, it may be that more detail is required to be able to assess the reasonableness of the expert witness fees involved in a case.
- “However, as I indicated in the June judgment, the assessment of the reasonableness of Deloitte’s fees cannot be conducted in a vacuum. There has to be sufficient detail provided to allow the Court to carry out the task required by the rules and, in particular, CPR 44.3 and 44.4.
- What is sufficient detail will vary from case to case. In the very common case, where an expert’s fee is claimed supported by an invoice along the lines of “writing report (x hours) x £y = £z”, that will usually be sufficient. The Court will have the report and can form a view as to how much time was reasonably spent writing it.”
Master Gordon Saker concluded the following:
“The assessment of costs is not of course, as precise as many think and is a great deal less precise than many assessments of damages. While the results are expressed arithmetically, almost every decision on assessment involves a value judgment as to the amount of time reasonably spent. Because of the common ground between the parties, the main issue on this assessment, where there is sufficient detail to form a judgment, is the value judgment that the Court should make as to the reasonableness of the time claimed. That is inevitably rough justice or as Russell LJ. explained, more elegantly, when describing the taxation of costs: “where justice is in any event rough justice, in the sense of being compounded of much sensible approximation”.
How Can ARC Costs Assist?
We have particular expertise in assisting in CPR 45 fixed costs disputes, when expert fees are often contested.
We provide wide-ranging legal costs services, whether it be initial advice as to your retainer, to assisting with the preparation of a Costs Budget or Bill of Costs, ensuring ample information is provided in a detailed costs document to ensure maximum recovery. We also assist paying parties in preparing Points of Dispute for those cases where you believe the costs claimed are unreasonably high.
Acting for the receiving party, we hold wide experience in preparing detailed Points of Reply and conducting costs negotiations.
Irrespective of which side you are on, ARC Costs are here to assist, and can conduct advocacy and any Detailed Assessment Proceedings on your behalf.
Should you wish to discuss a query further, please contact us on 01204 397302 or email one of the team at firstname.lastname@example.org. Alternatively, you may complete our online query form, and we will contact you to discuss further.