The background facts of this case are not as important as the legal principles enunciated by Donaldson J. This case was cited and referred to extensively in the Gallagher case. I won't detract from the eloquence of the decision by trying to precise it. Instead, I have simply extracted some of the "pearls".
"… the object of the exercise, whether a solicitor is preparing a bill of costs in relation to non-contentious business, or the Law Society is certifying such a bill, or the court is taxing it, is to arrive at a sum which is fair and reasonable, having regard to all the circumstances and, in particular, to the matters specified in the numbered paragraphs of article 2 of the order. It is an exercise in assessment, an exercise in balanced judgment - not an arithmetical calculation. It follows that different people may reach different conclusions as to what is fair and reasonable, although all should fall within a bracket which in the vast majority of cases will be narrow.
It also follows that it is wrong always to start by assessing the direct and indirect expense to the solicitor represented by the time spent on the business. This must always be taken into account, but it is not necessarily or even usually a basic factor to which all others are related. Thus, although the labour involved would usually be directly related to and reflected by the time spent, the skill and specialised knowledge involved may vary greatly for different parts of that time. Again, not all time spent on a transaction necessarily leans itself to being recorded, although the fullest possible records should be kept.
This error is compounded if, as an invariable rule, the figure representing the expense of recorded time spent on the transaction is multiplied by another figure to reflect the other factors. The present case provides an illustration of this error. The responsibility and value of the property involved were linked factors but neither was affected by whether the recorded time spent was 30 hours or 60 hours. Yet the application of a multiplier would double the responsibility/Value factor if the record of time spent had happened to be 60 rather than 30 hours.
In my judgment, the proper approach is to start by taking a broad look at all the circumstances of the case and in particular the general nature of the business. This should be followed by a systematic consideration of the factors specified in the paragraphs of article 2 of the order"
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