Breakdown Not Required For Interpreter Fees
Posted on 27th February 2025 at 14:04
The Court of Appeal in Santiago v MIB [2023] EWCA Civ 838 previously ruled in favour of the principle of recovery of interpreter fees in fixed costs matters. The claim has now come back before the court in order to address the question of what is a reasonable cost for an interpreter and whether a breakdown of the interpreter fees was required where an agency had been used. The interpreter fee claimed for a one day trial was £924 (inc. of VAT) the Defendant had sought assessment at nil or £300 (with no VAT allowed).
Speed Read
In Santiago v Motor Insurance Bureau (County Court at Central London) (21 February 2025) the court found that:
1. It is not unreasonable to utilise an agency for the purpose of interpretation/translation services - "it cannot have been unreasonable in principle to seek the services of an interpreter from a company rather than from an individual: there are many reasons why busy professional practitioners would prefer to do so."
2. Utilising an agency owned by the solicitor firm was also not unreasonable in principle - "In obtaining the service from an independent company which provided the service by its own employees the buyer of such services would necessarily be paying a sum towards the overheads and profits of the service supplier. That cannot be objectionable in principle. The fact that the service provider and the service buyer might be connected does not alter that principle in my judgment. The same overheads and profit would be included in the price which would be payable by the buyer. Nor does the fact that the service company might provide its services using independent contractors rather than its own employees."
3. No breakdown is required for interpreter/translator fees where an agency is used as the same is not a service provided by the solicitor and as such is to be treated as a disbursement - "it was a service or work which had to be outsourced in one way or another".
4. However, the Claimant here was permitted to provide comparator evidence as to fees charged by other companies providing interpreters for a one day court hearing. The Claimant's evidence demonstrated fees ranging between £528 to £1,560 (inc. of VAT). The Claimant accepted that the top end was not a reasonable figure. The Defendant did not challenge the Claimant's evidence.
5. It was rejected by the Court that "the reasonable rate is the lowest rate available or that, having economic muscle which might enable them to negotiate a lower than usual rate, means that the rate which the Solicitors in fact paid is not reasonable."
6. Any fee claimed must be reasonable and proportionate as per CPR 44.3. The court here reduced the fee to £794.40 (inc. VAT) (this been the mean figure derived from the Claimant's evidence) holding that the fee claimed of £924 (inc. VAT) was disproportionate to a "claim worth only £20,000".
What is clear is that there is a distinction between the use of an agency for work which has to be outsourced and work the solicitor would otherwise have done and the approach to the assessment of such fees will differ. Comparator evidence is clearly important in determining what a reasonable fee looks like but there remains a burden on the solicitor to ensure fees incurred are proportionate and reasonable. Here the fee excluding VAT of £770 was found to be disproportionate even though it equated to less than 4% of the claim value. Further, it is noteworthy that the court here rejected the preposition that it is the lowest sum which is reasonable.
Discretion will remain on the quantum of an interpreter's fees and whilst HHJ Dight CBE held here that a breakdown was not required, this remains a non-binding County Court judgment so this may not be the end of this particular debate. Clearly though it is assistive to those Practitioners who utilised an agency for translation & interpretation services.
The Arguments
HHJ Dight CBE considered the quantum of the interpreter's fee for trial. The Claimant sought a fee of £924 (inc. VAT), the Defendant argued the fee should either be assessed at nil because of a failure to provide a breakdown or it should be reduced to £300 (inc. VAT). The parties could not agree on a sum for the interpreter fee and the court's view was that a further hearing would be required to resolve the remaining disputes.
The Claimant's position was that "the only issue for determination was whether the Interpreter's Fee was excessive, and if it was excessive the court should reduce it to a reasonable amount". Further it was stated that:
"on a standard assessment the court will allow a fee which is (i) proportionate to the matters in issue and (ii) reasonable in amount, with any doubt being resolved in favour of the paying party, the defendant in this case, in accordance with CPR 44.3. He argued that there was nothing unusual in sourcing the services of an interpreter from a company, of which Mr Ryder’s evidence showed there were many, and it was obvious that the charges of such a company would be higher than the sum which was in fact paid by such a company to an individual interpreter, which did not per se render the total fee unreasonable nor did it entitle the paying party to disclosure of the components of the total fee. The fact that the Solicitors and the Company were in common ownership did not, he said, detract from the force of those submissions."
It was expressed by the Claimant that so long as the fee was within the general range for similar work the court should hold it to be reasonable.
The Defendant's position was that the agency element or 'outsourced profit cost' was "not an interpreter's fee" and that absent a breakdown the court should assess the fee at nil. It was also argued that:
"[...] the fee of a service company does not fall within the definition used by the Court of Appeal in Herbert v H H Law Ltd [2019] EWCA Civ 527;
d) In the circumstances, it was said, the element of the fee retained by the Company is irrecoverable in principle, and must be identified (by the Solicitors giving disclosure) and excluded from the total in order to reach a proper fee on assessment on the standard basis."
On the issue of reasonableness the Defendant's argument was the solicitors could and should have used the National Registry of Public Services to identify and retain a suitable interpreter for more than £300 net of VAT. Further it was contended that as per Aminu-Ede v Esure Insurance Company:
"a proper assessment requires transparency so that the court can work out what proportion of the Interpreter’s Fee was paid to Mr Alvarenga and, in the light of that, determine what sum in total would be proportionate and reasonable and that the court should therefore require the claimant to provide a breakdown;
d) Alternatively, Mr Marven KC submits that I can infer that the Company would have negotiated with Mr Alvarenga to pay him a fee at less than his standard rate of £300 and if there is any doubt about that it should be resolved in favour of the paying party"
The Decision - Agency Breakdown
HHJ Dight CBE firstly considered the agency point and specifically whether an interpreter fee was a disbursement:
"As a starting point it seems to me that one has to focus on the fact that the Court of Appeal held that an interpreter’s fee was recoverable under sub-paragraph CPR 45.29I(h) because it was a disbursement within the proper construction of that subparagraph. That means that unless it is a disbursement and insofar as it is not a disbursement it is not recoverable. Thus solicitors work and profit costs relating to the interpreter, if incurred, are not recoverable under this sub-paragraph. As May LJ said in Crane v Canons Leisure Centre [2007] EWCA Civ 1352 at para 4, “Solicitors charge disbursements at cost. They do not attract an uplift for profit nor a success fee.” I entirely accept Mr Marven KC’s submission that a profit margin cannot be added to the base fee."
The court therefore considered whether the Interpreter's Fee was a disbursement.
"29. [...] In identifying whether a charge was profit costs or a disbursement it seems to me that the distinction drawn by May LJ was between work which could properly be described as solicitors work (even if delegated) and work which was not provides a helpful guide. On that basis the Interpreter’s Fee was undoubtedly a disbursement. It was not solicitors work. It was a service or work which had to be outsourced in one way or another. It seems to me that such a finding also accords with the ordinary English meaning of the word (ie an expense which has been defrayed) and with common sense.
30. It is also in keeping with the view of what constituted a disbursement expressed by Sir Terence Etherton MR in Herbert v H H Law Ltd [2019] EWCA Civ 527 at para 66.
31. Mr Marven accepted that if the Company had provided an interpretation service using its own employees the fee charged by the Company would be a disbursement within sub-paragraph (h) and would not be objectionable as containing an “agency” component. Equally, it seems to me, as Mr Williams submitted, if an individual were to trade via his or her own service company which invoiced for all the work of the shareholder/director it could not properly be said that the fee charged by that company was not a disbursement.
32. The defendant’s real objection, to which I am not unsympathetic, is that the Solicitors and the Company are connected, that their mutual holding company or shareholders will profit from the fact that the Company was retained by the Solicitors to provide the services of an interpreter and that there is a lack of transparency in the transaction. If the Interpreter’s Fee had been paid to an independent company unconnected to the Solicitors I apprehend that this challenge would never have seen the light of day.
33. I have read the county court decisions to which I was referred (the Northampton General NHS Trust case and Aminu-Edu) but neither of them persuades me that the Interpreter’s Fee was not a disbursement nor that the interests of transparency mean that a breakdown has to be provided so that the agency component may be stripped out.
34. I accept Mr Williams’ submission that it cannot have been unreasonable in principle to seek the services of an interpreter from a company rather than from an individual: there are many reasons why busy professional practitioners would prefer to do so. In obtaining the service from an independent company which provided the service by its own employees the buyer of such services would necessarily be paying a sum towards the overheads and profits of the service supplier. That cannot be objectionable in principle. The fact that the service provider and the service buyer might be connected does not alter that principle in my judgment. The same overheads and profit would be included in the price which would be payable by the buyer. Nor does the fact that the service company might provide its services using independent contractors rather than its own employees.
35. I therefore decline to hold that the “agency” component should be stripped out or that the Interpreter’s Fee should be assessed at nil because of the Solicitors refusal to identify or particularise the “agency” component."
The Decision - Reasonableness and Proportionality
Having found that a breakdown was not required, the question turned to what would a proportionate and reasonable fee be. HHJ Dight CBE made it plain that as per CPR 44.3 "the court will only allow costs which are proportionate to the matters in issue and will resolve any doubt which it may have as to whether costs were reasonably and proportionately incurred or were reasonable and proportionate in amount in favour of the paying party."
The Claimant's position relied on Callery v Gray "in support of the proposition that in assessing what is reasonable I should focus on the rates charged by others in the market." The Claimant relied upon the comparator evidence it had provided within its witness evidence in this regard.
The Defendant's position was as follows:
"40. The defendant relies on paragraph 32 (at E) of Callery in support of the proposition that in assessing the costs the court should be careful to ensure that it has good information as to the rates payable in the open market given that this is not a price sensitive market where the individual litigants (who would be assumed to litigate under a CFA) will ever really have to pay the fees charged. I was again enjoined to look at the elements of the rate charged by the Company so that I can strip it out and compare like with like.
41. Mr Marven KC, relied on the fact that the burden was on the receiving party to prove that the Interpreter’s Fee was reasonable and proportionate and in his written submissions, he reminded me that when I gave directions for the final hearing I refused to order the claimant to give further information about the components of the Interpreter’s Fee on the basis that the claimant would be at risk if it failed to do so voluntarily. He argued that a breakdown should have been provided even if it only went to the question of reasonableness rather than the issue relating to the “agency” component. However, the absence of a breakdown is not evidence that the Interpreter’s Fee is reasonable or unreasonable. That question is to be determined by reference to the evidence of the market rate for similar services."
The court considered matters and concluded thus:
"42. In my judgment, in accordance with the guidance given by Lord Hoffmann it seems to me that in considering whether the Interpreter’s Fee was reasonable I must have regard to the market. Mr Williams posed the rhetorical question: what is the reasonable retail rate for an interpreter? The only evidence as to the market is that provided by Mr Ryder in his witness statement, which contains a useful selection of quotes for services similar to that provided by the Company. For the reasons which I have already given it does not seem to me inappropriate for the claimant to have used a service provider, as opposed to an individual, nor is it necessary to ascertain how each of the service providers (or the Company) reached the price at which they offered their services to the Solicitors. Indeed Mr Williams says that I can assume that the Company paid Mr Alvarenga much less than the sum charged to the Solicitors. The issue being, he submitted, is what was charged overall a reasonable retail rate?
43. Additionally, in applying Lord Hoffmann’s reasoning in paragraph 32, it seems to me that the buyers in the market are probably all solicitors, rather than individuals, and there is no need to ask the separate question, suggested inferentially by Mr Marven, as to what an individual litigant in the market would pay for the services of an interpreter as opposed to the price which that litigant’s legal representatives, who are procuring the service, would pay. There is no evidence to suggest that the market rates given by Mr Ryder are not competitive.
44. Further, it seems to me that the fact that the Interpreter’s Fee falls within the range of fees referred to in Mr Ryder’s evidence, albeit towards the top end, shows both that his evidence on market rates is not inherently unreliable and that the Interpreter’s Fee itself is not out of kilter with the market.
45. I note, again, that the defendant does not challenge the evidence of market rates given by Mr Ryder.
46. I also reject Mr Marven’s suggestion that the reasonable rate is the lowest rate available or that, having economic muscle which might enable them to negotiate a lower than usual rate, means that the rate which the Solicitors in fact paid is not reasonable.
47. In all the circumstances it seems to me that because the Interpreter’s Fee is at the high end of the range described by Mr Ryder I should trim it slightly to arrive at the reasonable figure. I also bear in mind in considering proportionality that a figure of £924 is slightly high when compared to a claim worth only £20,000. In all the circumstances I assess the Interpreter’s Fee at the mean figure derived from Mr Ryder’s quotations, namely £662 (and VAT), a total of £794.40."
Do you want to discuss matters relating to disbursement recovery or simply costs matters generally? We are always happy to have a chat and provide a view or advice on strategy, tactics and/or approach. The court's comments again show the importance of comparator evidence when assessing the reasonableness of interpreter fees. Should you want to discuss this or any other issues, then you can give us a call on 01482 534 567 or email info@carterburnett.co.uk.
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