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From strike-outs and wasted costs to group litigation: our monthly costs cases summary


Royal Courts of Justice: decision time

Litigation Futures is now publishing a monthly summary of key costs-related court decisions. These are provided by CaseCheck [2]

Cummings & Ors v The Ministry of Justice [2013] EWHC 48 (QB)

Application by defendant for costs incurred in consideration and preparation of struck-out witness evidence disclosed by the claimants at a pre-trial review.

Held: Although frequently disregarded, the Queen’s Bench Guide at paragraph 7.10.4 concerning witness statements is clear: a witness statement should consist only of the relevant issues and should be as concise as the circumstances allow; admissible or irrelevant material should not be included (paragraph 7.10.4(2) and (3)).

As such, claimants’ costs of preparation of excluded witness statements or parts of witness statements disallowed and order made for claimant to pay defendant’s costs incurred in respect of that evidence. It was for the costs judge to decide whether any costs should be allowed for the time spent identifying, contacting and visiting witnesses who may, but did not, have relevant evidence to give.

Full ruling here [3].

Jones & Ors v Secretary of State for Energy And Climate Change & Ors [2012] EWHC 3647 (QB)

Determination of individual and common costs in group litigation arising from partially successful claims for non-malignant and malignant disease caused by exposure to dust and fume in the course of employment.

Held: In order to avoid unnecessary complexity and costs, it was more appropriate to express an award by reference to the percentage of the total costs and not on an issue-by-issue basis. There was no reason to depart from the general rule that the unsuccessful party will be ordered to pay the costs of the successful party be reference to the litigation as a whole.

In the present case, the claimants were successful at trial and prima facie entitled to costs: they had succeeded in establishing that the defendants had been in breach of duty although causation was not proved in some of the lead claims.

It was not appropriate to exclusively consider events at trial when determining reduction of costs. The proper approach was a broad brush assessment of the appropriate percentage reduction based on the course and outcome of the litigation as a whole, taking into account relevant factors identified in the CPR. Appropriate reduction was assessed at 20%.

An application by the claimants for an order that the defendants also pay interest on disbursements from the date of payment deferred, the claimants ordered to disclose provisions of conditional fee agreements relating to the disbursements for consideration at the forthcoming hearing.

Full ruling here [4].

Re A (A Child) [2013] EWCA Civ 43

A local authority sought a wasted costs order against a firm acting in care proceedings on the grounds that an application for permission to appeal amounted to improper, unreasonable or negligent litigation conduct (s.51(6) of the Senior Courts Act 1981 [5]).

Held: Despite poorly conducted litigation, none of the errors were causative of costs being wasted. The law on wasted costs was clear, as expounded in Ridehalgh v Horsefield [1994] EWCA Civ 40 [6] and Harrison v Harrison [2009] EWHC 428 (QB) [7]. Such an order is compensatory rather than punitive or regulatory. It would therefore be outside the court’s jurisdiction to award costs simply to mark the court’s condemnation.

In the present case, the lack of full and frank disclosure by the solicitors at the first without-notice hearing, a mis-statement as to the time available for case preparation, a serious and gross failure to disclose material promptly and a failure to send essential reading to an instructed expert did not cause wasted costs.

Further, the manner in which proceedings were pursued was not the result of any improper or unreasonable act or omission of the solicitors but arose almost entirely from the over-optimistic judgment of counsel, who was not included in the application.

Full ruling here [8].

DD v Durham County Council & Anor [2013] EWCA Civ 96

Appeal against (i) a decision to refuse leave under s.139(2) of the Mental Health Act 1983 [9] concerning the scope of the duty of an approved mental health professional to exercise independent judgment and (ii) part of an order requiring the appellant to pay the costs that the first respondent had been ordered to pay to the second respondent.

Held: The low threshold under s.139 was met: the scope of the duty was a question of law of some importance that required to be remitted to a judge. Regarding the costs order, the appellant should not have been made responsible for the costs of the second respondent.

Although it was reasonable for the first respondent to join the second respondent, the fact that the law was not clear was not a basis for making the appellant pay those costs. The first respondent had failed on the point against the second respondent and should bear the costs on ordinary principles.

Full ruling here [10].

Knox D’arcy Operations Ltd & Anor v Manches LLP [2013] EWCA Civ 33

Appeal of, among other things, an order requiring a firm, who retained and used money received into their client account from the claimants to settle fees contrary to an assignment, to pay 75% of the claimants’ costs.

Held: There was no arguable basis for a challenge to the costs order. The judge did not err in finding that the claimants indicated with sufficient certainty that there had been an assignment nor in principle in his approach to costs. Although the claimants had failed on their damages claim, they achieved overall a substantial measure of success.

Full ruling here [11].

Barnett & Ors v Nigel Hall Menswear Ltd [2013] EWHC 91 (QB)

Appeal against striking-out of claim under CPR 3.4(2)(b) raising the issue, among other things, as to whether a cost complaint was a relevant factor in a determination of Henderson abuse ((1843) 3 Hare 100, as further explained in Johnson v Gore-Wood [2000] UKHL 65 [12]).

Held: Evidence of the defendant’s financial circumstances, although untested, was relevant: any deterioration in a defendant’s commercial or financial circumstances, including any which occurs in a period of delay in the proceedings, is part of the relevant background, although the weight to be attached is a matter for the tribunal hearing the case.

In the present case, it would not be fair to subject the defendant to the stress and expense of addressing the merits of the claim for a second time, especially when there was evidence that the defendant could not now afford legal representation.

Full ruling here [13].