In addition to conveyancing costs payable under section 23 CPA 1965 other legal costs may be reasonably and necessarily incurred by a vendor in connection with the taking of land which are properly compensatable by the acquiring authority, eg costs payable to a solicitor for formulating or negotiating a settlement of a claim and those incurred in the purchase of an alternative property (‘Harvey’ costs) see Paragraph 5.9. These are payable by the acquiring authority under the heading of compensation for ‘disturbance or any other matter’ within the ambit of Rule (6) of section 5 LCA 1961. These costs are referred to as compensation costs and should be included by the valuer in arriving at the compensation figure payable so that in reporting provisionally agreed terms to the acquiring authority the recommendation to pay the vendor’s ‘proper legal costs’ will refer only to conveyancing costs payable in accordance with section 23 CPA 1965.
The acquiring authority should not be required to accept liability for costs incurred in obtaining apportionments of mortgages solely for advance payment purposes. Claims in respect of solicitors’ costs incurred in obtaining a discharge of a mortgage for advance payment purposes, where these fall to be borne by the acquiring authority under section 23 CPA 1965, will be dealt with by the authority’s solicitor at the completion stage.
Care should be taken to ensure as far as possible that the costs incurred in obtaining a discharge of a mortgage for advance payment purposes, the preliminary work in examining the nature of the claimant’s interest, the incidence of land charges and the like is not the subject of a recommendation for compensation costs when it is only part of the conveyancing work which has been done at an early stage. Any other kind of duplication, for example, work for which a surveyor’s fee is to be paid should also be avoided.
5.8 Solicitor’s incidental costs
Difficulties sometimes occur in dealing with minor legal expenses, eg solicitor’s costs in connection with the service of Notice to Treat and Notice to Enter and the preparation and submission of a claim for compensation. Whilst strictly such costs are not covered by section 23 CPA 1965 and should be included in the compensation settlement as compensation costs, in practice such costs are normally dealt with by the acquiring authority’s solicitor at the same time as conveyancing costs and as part of the ‘proper legal costs of the vendor’. This practice is clearly administratively more convenient and avoids the possibility of duplication which could occur if the valuer agreed and included such costs in the compensation settlement. In the circumstances valuers should continue to report cases on the assumption that such incidental legal costs are within the ambit of ‘the proper legal costs of the vendor’.
If an acquiring authority specifically requests that such incidental costs be included in the compensation settlement notwithstanding the normal practice of including them as part of the conveyancing costs, the valuer should proceed as requested giving details in the report of the work undertaken by the solicitors for which costs have been agreed and included in the compensation settlement and the amount of such costs.
5.9 ‘Harvey’ costs
In order to reach a settlement as to the compensation properly payable where a claimant who has been displaced has purchased alternative accommodation, the valuer will need to include (where appropriate) an agreed amount for legal costs properly incurred in obtaining such accommodation. Although competent to advise on the admissibility of such a claim the valuer should not become involved in negotiating the amount of the remuneration of solicitors or Counsel unless it is known that the acquiring authority wishes this to be done. If the valuer had any difficulty in settling the amount of such costs the case should be submitted through the normal channels to the acquiring authority’s solicitor.
5.10 Solicitor negotiating
Where a settlement of compensation has been agreed with the claimant’s solicitor, a note to this effect should be added to the report in order that the acquiring authority may take account of this when settling the amount of legal costs. In this case the valuer would not recommend payment of a separate surveyor’s fee.
If the valuer were requested by an acquiring authority to advise on the reasonableness of solicitors’ negotiating fees where a solicitor had negotiated a settlement of compensation, the valuer should bear in mind that the total fee payable to the solicitor should not exceed the fees that would have been payable had more than one professional person been involved, for example a solicitor and a surveyor.
Reports should differentiate clearly between ‘conveyancing’ costs and ‘compensation’ costs. The former should be reported in the space provided for legal costs and a note inserted therein drawing attention to there being also ‘compensation’ legal costs except where such compensation costs are limited to ‘Harvey’ expenses. Any sums agreed for compensation costs should be included in the total compensation and details of these items other than for ‘Harvey’ expenses should be given under ‘Remarks’ together with any agreed figures.