No costs for ghostwriting – a sad day for unbundling

The short judgment in Sax v Simpson & Anor [2017] NZHC 1128 is a disappointing blow to unbundled assistance in New Zealand. It concerns the question of whether costs can be awarded to a successful litigant in person (LiP) where their submissions were ghostwritten by a lawyer.

The New Zealand rule is that litigants in person are not entitled to costs, only out of pocket expenses.[1] In the leading case, In Re Collier (a bankrupt),[2] Temm J said that whether LiPs should be paid for their “time and trouble raises many important considerations of both policy and practice, and … is not really a matter that can be solved by a Court”.[3] One of the “policy” reasons, hinted at but not explained, is that awarding costs to LiPs might encourage more LiPs. The rule and its reasons are highly questionable: Canada has seen the light and has been moving away from it. I am not going to take issue with the rule in general (I’ll save that for another day) but only with the relationship between the rule and unbundled assistance.

Sax v Simpson affirms the rule that LiPs who have expended their own effort and energy preparing a case are not entitled to costs and goes a step further, holding that LiPs cannot claim costs for ghostwritten assistance. The case concerns a family law dispute and the facts are a little convoluted. I’ll try and be brief:

  1. Ms Sax was ordered to pay security for costs in respect of an application she had brought. Ms Sax applied to have that order set aside. Mr Simpson, represented by Mr Eggleston, opposed her application. Duffy J refused Ms Sax’s application (i.e. Mr Simpson won) and recorded her reasons in a judgment of 30 June 2015.
  2. Ms Sax, undeterred, applied to recall the 30 June 2015 judgment. Mr Simpson filed a memorandum in opposition to the recall application. That submission was ghostwritten by Mr Eggleston and the cover sheet recorded Mr Simpson as appearing in person and gave Mr Simpson’s address for service. In other words, Mr Eggleston had provided unbundled assistance to Mr Simpson. The memorandum, asked for the recall to be dealt with on the papers. The recall application was, however, scheduled for a hearing.
  3. Before the hearing, Mr Simpson filed a second memorandum setting out his submissions. This memorandum recorded Mr Eggleston as counsel and had Mr Simpson’s solicitors on the cover sheet. Mr Eggleston also signed the memorandum.
  4. At the hearing, Mr Simpson appeared in person. He successfully opposed Ms Sax’s application for recall. That is, Mr Simpson won – again.
  5. Mr Eggleston filed a memorandum on behalf of Mr Simpson seeking costs for defending the recall application. The memorandum sought half of the 2B scale costs for the step on the basis that he provided limited, rather than full assistance.

The New Zealand rule is that if Mr Simpson was represented, he would qualify for costs. If he was not represented, he would not qualify for costs. Duffy J restated this rule and then dismissed ghostwriting as a form of representation that can lead to a costs award:

… there can be no half way house form of representation where counsel simply remains in the background giving advice on legal argument and even preparing it. This may occur in fact, but when it does I do not consider it qualifies as a form of legal representation that can form the basis of a costs award.

Why exactly “there can be no half way house form of representation”, particularly when a half way house is clearly being inhabited here, is not elucidated. Duffy J is clearly troubled by Mr Eggleston popping in and out of sight and she gives him a judicial rap over the knuckles for doing so, calling his conduct “somewhat out of the ordinary” and “not conduct which counsel should adopt on his or her initiative”. The message is fairly clear: you are either appearing (costs follow) or not appearing (no costs follow) and any variations from this need the consent of the court.

She does leave the door slightly ajar for costs being awarded for ghostwritten submissions, but it is a thin slither of light. If ghost written submissions are to be eligible for a costs award then they have to vault over a very high bar:

Behind the scenes assistance from barristers has not previously been recognised as qualifying for an award of costs, nor do I think that generally it should do. There may be room for recognition of the exceptional case such as where the assistance is on a difficult area of law and it has largely contributed to the successful outcome of a lay litigant’s case.

This is hardly encouraging for counsel considering whether or not to offer unbundled assistance. Winning submissions are not going to be sufficient; they have to argue a difficult point and be seen as key to the LiP’s success.

So why should behind the scenes assistance not qualify for an award of costs? What is wrong with supporting the half way house? Unbundled assistance is usually offered because the litigant has run out of funds to pay for full assistance. Money is therefore tight. The litigant might pay for some assistance and help preparing submissions, usually difficult for a litigant with limited access to legal resources, would be an obvious thing to spend some money on. If the lawyer is worth the money spent, the submissions will be short, relevant, and persuasive. That would be a win for the judges who frequently bemoan the difficulties LiPs have in presenting their cases, including difficulty presenting effective submissions (and differentiating submission from evidence). It would also be a win for the LiP who is wanting some help in a difficult task and a win for the lawyers, both the lawyer providing unbundled assistance (a stream of income) and the lawyer opposing (a clear document to reply to). Instead of encouraging the practice, Duffy J suggests only the very best submissions might be worthy of a costs award, introducing a quality test that isn’t present elsewhere in the cost regime. I think Sax v Simpson looks decidedly like the Court looking a gift horse in the mouth.

My short, and hopefully persuasive submission, is that it is time the Court responded with new rules and clarity for counsel in Mr Eggleston’s position. Popping up and down like a whack-a-mole is obviously not to the Court’s taste. Fair enough. So why not require ghostwritten submissions (and for that matter pleadings, another thorny problem for LiPs) to have a standard note on the coversheet: “This document has been prepared by counsel acting on a limited assistance brief. The respondent appears in person”? Would that not clear the situation up and avoid the problems here with counsel playing peek-a-boo? If the LiP is successful, a document sporting the tag should qualify for a costs award, allowing the LiP to recoup their out of pocket expenses, just like they can disbursements. It would be a small but important step towards fostering affordable legal assistance – good for the courts and good for access to justice.

[1] Out of pocket expenses, referred to as disbursements, includes legal fees for limited retainer advice: Official Assignee v Cavell Leitch Pringle & Boyle HC Christchurch CP131/88; B28/91, 18 August 1995.

[2] Re Collier (A Bankrupt) [1996] 2 NZLR 438 (CA).

[3] Re Collier at 441 per Temm J.