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In the case of Kellie and another v Wheatley & Lloyd Architects, the Claimants had instructed an architect to design and supervise works at their home. The works included converting a garage into a granny annex and building a new garage and car port. The architect was also instructed to obtain the necessary planning permission.
Ultimately, the parties fell out because the Claimants became dissatisfied with the standard of the builders work, the performance of the Defendant and due to increased costs and delay in the works being completed. The Claimants alleged that the Defendant had failed to supervise the building works properly and had failed to design the garage in accordance with their preferred style. The Claimants alleged that this cost them more money and that their property’s value had decreased. The Court rejected those arguments.
In line with the normal costs rule that the loser pays the winner’s costs, the Claimants were ordered to pay the Defendant’s costs. At a subsequent hearing, the Claimants were ordered to pay all of the Defendant’s costs on the standard basis (i.e. all costs that had been reasonably and proportionately incurred by the architect in defending the court proceedings). The Claimants conceded they were liable to pay at least 90% of the architect’s costs. Despite the architect having an agreed costs budget of £91,700, the Court increased that costs budget to take into account, amongst other things, that the trial had been longer than anticipated. Consequently, the Claimants were ordered to make a payment on account of £90,000 with the balance of the architect’s costs to be assessed by the Court if not agreed between the parties.
The Claimant’s claim had only been valued in the region of £20,000 to £30,000. This case is therefore a clear example of when costs can easily exceed the value of the claim. It also serves as a warning as to the risks of litigation. These risks could have been reduced if the Claimants in this case obtained ATE insurance to cover the other side’s costs in the event of a loss.
Myerson Solicitors LLP are the premier commercial litigation solicitors in Cheshire and South Manchester. Our expert solicitors can advise on all aspects of commercial disputes including professional negligence matters. Please contact us today on 0161 941 4000.