Factual and Procedural Background
The Appellant, a well-known professional tennis player, through his company, entered into endorsement contracts with two non-UK resident sports clothing manufacturers. A tax question arose regarding whether the Appellant, resident in the US, was assessable to UK income tax under section 556 of the Income and Corporation Taxes Act 1988 for payments related to his UK sports activities. The Special Commissioners found him assessable, a decision upheld by Lightman J. However, on 19 November 2004, the Appellant's appeal was allowed by this court. The question of costs was adjourned due to a principled issue raised by HM Revenue and Customs disputing the recoverability of costs incurred by the Appellant in retaining Messrs Tenon Media ("Tenon"), experts in tax law. The court was assisted by the Senior Costs Judge acting as assessor.
Tenon, whose member Mr Christopher Mills is licensed under the Bar's Licensed Access scheme to instruct counsel, acted for the Appellant to provide tax expertise and instruct counsel for appeals. The Appellant chose Tenon over solicitors due to their familiarity and expertise with his tax affairs and the limited nature of the litigation, which involved statutory interpretation without evidence or witnesses. The appeal focuses on the costs treatment of fees paid to a Chartered Institute of Taxation member who lacks the statutory right to conduct litigation.
Legal Issues Presented
- Whether the Appellant is a litigant in person within the meaning of CPR 48.6.
- Whether Tenon's fees are irrecoverable because the services were supplied in breach of sections 20 or 22 of the Solicitors Act 1974 or section 70(1) of the Courts and Legal Services Act 1990.
- Whether Tenon's fees are recoverable by the Appellant either (a) as costs under section 51 of the Supreme Court Act 1981 and CPR 44.3(1), or (b) as a disbursement under CPR 48.6.
Arguments of the Parties
The opinion does not contain a detailed account of the parties' legal arguments.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Gregory v Turner [2003] EWCA Civ 183 |
Interpretation of the Courts and Legal Services Act 1990 as a comprehensive modern code governing rights to conduct litigation. |
Used to explain the statutory framework and confirm the Appellant’s status as litigant in person under section 28(2)(d). |
| Jonathan Alexander Ltd v Proctor [1996] 1 WLR 518 |
Definition of "litigant in person" as an unrepresented individual. |
Distinguished on facts; clarified that representation via Licensed Access does not negate litigant in person status. |
| The Law Society of the United Kingdom v Waterlow Brothers and Layton (1883) 8 App Cas 407 |
Meaning of "acting as a solicitor" includes doing acts that only solicitors may perform. |
Established that unqualified persons performing acts reserved to solicitors breach section 20. |
| In re Ainsworth, ex parte the Law Society [1905] 2 KB 103 |
Giving notice of appearance by unqualified person breaches Solicitors Act. |
Supports restricted scope of acts reserved to solicitors. |
| Piper Double Glazing Ltd v DC Contracts [1994] 1 WLR 777 |
Clarified "acting as a solicitor" means performing acts only solicitors may do, not merely doing solicitor-like tasks. |
Adopted as authoritative test for section 20 interpretation. |
| Regina (Factortame Ltd and others) v Secretary of State for Transport, Local Government and Regions (No 8) [2002] EWCA Civ 932 |
Restricted ambit of "conduct of litigation" under Courts and Legal Services Act 1990 and Solicitors Act 1974. |
Confirmed that forensic accountants providing ancillary services are not acting as solicitors or conducting litigation. |
| Buckland v Watts [1970] 1 QB 27 |
Definition of disbursements recoverable by litigants in person includes payments to professional advisers. |
Used to assess whether Tenon's fees qualify as recoverable disbursements. |
| United Building and Plumbing Contractors v Malkit Singh Kajila [2002] EWCA Civ 628 |
Distinction between legal services and disbursements for litigants in person; fees for non-lawyer assistance not recoverable as costs. |
Applied to deny recovery of fees for non-authorised legal services. |
| Hart v Aga Khan Foundation (UK) [1984] 1 WLR 994 |
Supports principle that only legal representatives may recover fees for legal services. |
Supports restrictive approach to recoverable costs. |
| R v Legal Aid Board ex p Bruce [1992] 1 WLR 694 |
Non-lawyer expert advice not recoverable as disbursement under legal aid scheme. |
Supports narrow interpretation of recoverable costs. |
| In re Pomeroy & Tanner [1897] 1 Ch 284 |
Costs of agents employed by solicitors are part of solicitor’s costs, not disbursements. |
Illustrates that delegated legal work is not recoverable as disbursement separately. |
| Callery v Gray (No1) [2001] EWCA Civ 1117 |
Broad meaning of "proceedings" includes ancillary applications and appeals. |
Supports statutory interpretation context. |
| Crosbie v Munroe [2003] EWCA Civ 350 |
Illustrates wide ambit of "proceedings". |
Contextual reference. |
| Jonathan Alexander Ltd v Proctor [1996] 1 WLR 518 (per Buxton J) |
Clarification on costs recoverable by litigants in person. |
Supports principle that legal services must be provided by legal representatives. |
| London Scottish Benefit Society v Chorley (1884) 13 QBD 872 |
Only solicitors entitled to charge for exercise of professional legal skill. |
Historical authority on costs recovery. |
Court's Reasoning and Analysis
The court began by examining the statutory framework governing the right to conduct litigation and the definition of acting as a solicitor under the Solicitors Act 1974 and the Courts and Legal Services Act 1990. It recognized that the Appellant, although represented by counsel instructed through a Licensed Access scheme by Tenon (a non-solicitor professional body), remains a litigant in person under CPR 48.6. This conclusion was supported by statutory interpretation and the Guidance Notes issued by the Bar Council, which clarified that members of the Chartered Institute of Taxation instructing barristers under Licensed Access must conduct litigation as litigants in person.
Next, the court analyzed whether Tenon's activities breached prohibitions in the Solicitors Act 1974 sections 20, 22, and 25 or the Courts and Legal Services Act 1990 section 70. Applying the test from Piper Double Glazing and Factortame (No 8), the court held that "acting as a solicitor" is limited to doing acts reserved exclusively for solicitors, such as issuing proceedings or performing formal ancillary litigation functions. The court distinguished these from administrative support tasks or providing legal advice by unqualified persons, which are not prohibited. It acknowledged the difficulty in drawing a precise boundary but favored a restrictive interpretation of these provisions due to their penal nature.
Regarding the recoverability of Tenon's fees, the court considered the statutory and procedural rules on costs for litigants in person, particularly CPR 48.6 and the Litigants in Person (Costs and Expenses) Act 1975. It emphasized the distinction between legal services and disbursements. While counsel's fees are recoverable as disbursements, fees paid to non-lawyer professionals for legal services are generally not. The court relied on United Building to reject the argument that Tenon's fees for legal advice and assistance could be recovered as disbursements. However, it recognized that some specialist expert assistance provided by Tenon might qualify as recoverable disbursements, given the specialist nature of the work and the precedent in Factortame (No 8).
The court refrained from making definitive findings on the recoverability of specific items in Tenon's bill due to insufficient argument and directed a detailed costs assessment by the Senior Costs Judge, guided by the principles articulated.
Finally, the court noted the policy considerations favoring the Licensed Access scheme as a more efficient and cost-effective means of advocacy in specialized areas, while also recognizing the limits imposed by existing statutory frameworks on recovery of costs for non-authorised legal services.
Holding and Implications
The court held that the Appellant is a litigant in person within the meaning of CPR 48.6 and that Tenon's fees cannot be wholly recovered as costs from the opposing party if they relate to services that constitute acting as a solicitor or conducting litigation without statutory authority.
The court ruled that Tenon's fees for legal services are not recoverable as disbursements under CPR 48.6, but some specialist expert assistance may be recoverable as disbursements.
The court directed a detailed assessment of costs to determine which parts of Tenon's fees are recoverable. It emphasized that the decision does not prevent the use of Licensed Access arrangements or the employment of non-solicitor professionals like Tenon, but it limits the extent to which such costs can be recovered from the opposing party.
No new precedent was established beyond clarifying the application of statutory provisions to costs recovery in this context. The court suggested that the Chartered Institute of Taxation consider seeking status as an authorised body under the Courts and Legal Services Act 1990 to enable its members to become authorised litigators, which would allow fuller recovery of their fees as legal services.