CRS: Advice on compensation was largely unnecessary
A tribunal has more than halved the fees charged by a leading law firm for advice on the forced sale of a property affected by HS2.
All the heads of compensation Tracey Chambers would receive were agreed except for the fees of the Guildford office of Charles Russell Speechlys (CRS), meaning that they had to be determined by the Upper Tribunal (Lands Chambers).
Her house in Mexborough, a town in Doncaster, South Yorkshire, was safeguarded for the route of phase 2 of HS2 in November 2016 and soon after surveyors acting on her behalf issued a blight notice on HS2 Ltd in an attempt to force its acquisition on compulsory order terms.
The notice was accepted and the surveyors submitted a claim for compensation, with CRS instructed soon after.
The surveyors agreed the purchase price (£162,500) and the other heads of compensation, with HS2 paying in full their fees of £4,467.
Ms Chambers paid two invoices from CRS in 2020: £6,913 for “HS2 Advice” – 20 hours of work by a litigation partner and more junior solicitor at an average hourly rate of just under £294; and £5,769 for the sale – with two solicitors doing most of the 27 hours of work at an average rate of £177.
This made a total of £12,682 (all sums quoted, except the hourly rates, inclusive of VAT).
HS2 argued that much of the work was unnecessary or duplicated work undertaken by the surveyors, and that the same outcome could have been achieved at a much lower cost.
Evidence from HS2 showed that the legal fees for a sale-only paid to 43 owners on the road ranged between £500 and £2,450, with an average of £880. The highest fee paid for a sale and purchase was £4,250. It had offered Ms Chambers £1,000.
In his ruling, deputy chamber president Martin Rodger KC said these figures suggested either that the work done by CRS or the rates it charged were excessive.
He said Ms Chambers was not required to engage the cheapest solicitors she could find, nor local solicitors, “and having been introduced to a firm who specialised in compulsory purchase at an early stage I do not think it was unreasonable for her to remain with them and for work to be done at their usual rates”.
But the fees were “out of proportion to the value of the property and the complexity of the job”.
CRS agreed that more time was spent on the sale than usual but blamed delays and lack of engagement by HS2’s solicitors. However, the judge found no evidence to support this.
“Unnecessary internal liaison, and a higher level of communication with the client than perhaps would have been permitted had the bill not been payable by someone else, both contributed more significantly to the time spent on the file,” he found.
The judge allowed 20 hours, meaning a figure of £4,320.
On the advice bill, CRS said that, after the blight notice was accepted, it was engaged to provide advice “as to the approach to resolving matters if agreement could not be reached”.
The judge observed: “But agreement was reached on all heads of compensation other than the solicitors’ own fees and they have not demonstrated that they contributed much of any value to that process.
“The surveyors were themselves experts in compulsory purchase and compensation and no issue has been identified on which litigation advice was required.”
He allowed £1,000 to cover CRS’s work in opening the file and giving initial advice, “which ought reasonably to have been to the effect that the matter could safely be left in the hands of the transactional solicitors and the surveyors, without litigation involvement, unless a problem was encountered”.
Once the transaction had been completed, a further £1,600 was incurred in fees in connection with the compensation claim itself.
That too must have involved “some significant overlap” with the surveyors and it was not reasonable for the claimant “to incur the expense of two different professionals to achieve an outcome which either of them could equally well have achieved on their own”.
Ms Chambers was nevertheless entitled to be advised, including on the disputed sale fees for which she has recovered more than HS2 was offering, and for that advice the judge allowed a further £600.
This meant a total of £6,240, 49% of the amount claimed. The judge said he would assess the costs of the case summarily after receiving further submissions.
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