A lot of fuss and bother over nothing?

Ghattaorya v Bailey LTLPI 05/10/2009

My case of Ghattaorya v Bailey on miscellaneous expenses is several years old, yet it still attracts vast numbers of hits on my site. One cannot its importance when Part 36 offers are close, and thousands of pounds in costs can turn on whether this is allowed or disallowed. Do not ignore miscellaneous expenses!

Claimant solicitors plead ‘miscellaneous’ expenses as an almost mandatory ‘add-on.’ This is to cover the cost of subsidiary expenses which have been incurred because of the litigation. Whilst it is that you cannot recover stress and anguish incurred because of litigation, the miscellaneous claim seems to have slipped through the net as a legitimate expense.

This head of deserves closer inspection: The miscellaneous claim is for telephone calls, postage and stationary - travel is usually claimed for separately. Miscellaneous claims in your average fast track case typically range from about £10 to £50.

There may have been the cost of posting an initial form reporting the incident to the insurer or solicitor, perhaps with a covering letter. However, many insurance companies take a claim over the phone now, rather than requiring the completion of a form, or provide a pre-paid envelope. The postage, therefore, is probably no more than one or two stamps, so less than say, £1.

The cost of stationery – a single sheet of writing if any, well with a ream costing around the £3 mark for 500 sheets that’s not even a penny.

Many insurance companies and solicitors firms provide free-phone numbers or call numbers, e.g. 0845. Some solicitors firms now encourage all correspondence with the lay client to be by email. BT charge mere pennies per minute for geographic calls from a landline, and if the claimant is on an all-inclusive package then there is no extra cost to them. All-inclusive phone packages are more common now, and the chances are more claimants will be on some form of ‘TV/Telephone/Broadband’ package.

Put the claimant to proof and a judge will laugh at you, as there are hardly ever any receipts for these sorts of expenses. Cross-examine, and you risk the wrath of the judge and a stop being placed on cross-examination thus deemed ‘unnecessary’. Most sensible Counsel (with sensible instructions) will get their heads together before trial and some compromise figure.

However, if you must press ahead and attack the claim in court, zip in with a pin-point question. The most devastating attack, however, is simply to ask the judge to compare the length of time claimed on the cost schedule for telephone attendances on the claimant, with the cost at even 5.25p/min for even every single call. The miscellaneous claim is then often dealt a hefty blow by the judge’s pen.

In this case, the judge dismissed the entire head of claim for miscellaneous expenses, noting that claiming for miscellaneous expenses was ‘a bad habit claimant solicitors had got into’.

That principle was approved by HHJ Harrington in Harwood v Kapek (2010) LTLPI 21/7/2010 citing the failure to correctly plead the losses under this head as the reason for not allowing a miscellaneous claim, Ghattaorya v Bailey approved.

There are a few (easier to spell) other cases on miscellaneous expenses, but Ghattaorya v Bailey is the most well known and often referred to.

Click here for a copy of the judgment.