Costs News

27 May 2020
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News in brief - 28.05.2020

Court delays Judgments Act interest for three months
The High Court has postponed the date from which interest should run on the Judgments Act rate for three months from the date of the costs order, in a case where there was a large bill with little detail.

In Allianz Global Corporate and Specialty SE and Ors v Lotus Holdings LLC [2020] EWHC 1323 (Ch), three of the defendants sought a postponement of the date from which interest should run on the Judgments Act 1838 at the rate of 8% to three months after the costs order is made.

They cited Involnert Management Inc v Aprilgrange Ltd [2015] EWHC 2834, in which Mr Justice Leggatt (as he then was) held that the rule in Hunt v RM Douglas (Roofing) Ltd [1990] 1 AC 398 was clear: the default date from which interest payable begins to run is the date the judgment is given, if the court does not order otherwise. However, there was no need for the default position to be the usual position. The court has the power to order otherwise under CPR 40.8(1)(b), and it should exercise its discretion in accordance with the overriding objective.

Leggatt J considered that it was important to provide certainty and clarity on the date from which interest begins to run. A reasonable objective benchmark was the three-month period for commencing detailed assessment under CPR 47.7. By this date, the paying party should have received a detailed bill of costs and will be able to take an informed view of its liability before it begins to incur interest.

The defendants in Allianz submitted that the circumstances of the present case justified a three-month deferral because the claimants' costs bill of £495,000 was large given it was a part 8 claim with a short trial and little/no factual dispute, and with a basic schedule of costs containing little detail, the court and defendants “have no visibility as to proportionality and reasonableness”.

Further, they argued that, in three months' time, the claimants would have submitted their bill of costs for detailed assessment, meaning the Judgments Act rate would apply from the date on which the defendants as the paying parties would know what they were being asked to pay.

In addition, they submitted that, given the current very low interest rate climate, to order otherwise would be a significant and disproportionate benefit to the claimants, while the claimants were large insurance companies such that their “costs of funds are likely to be negligible (i.e. no need to borrow to fund litigation)”.

The claimants argued for the default position, saying there had to be a reason to depart from it and none existed here.

Mr Andrew Hochhauser QC, sitting as a deputy High Court judge, said he was persuaded by the defendants’ submissions to adopt the approach of Leggatt J.


Rule committee told to review recovery of disbursements in fixed-costs cases
The Supreme Court has said the Civil Procedure Rule Committee should review whether disbursements in fixed-costs cases should be recoverable separately.

The court has refused permission to appeal last October’s Court of Appeal ruling in Aldred v Chan, saying it did not raise a point of law of general public importance, but said it was appropriate for the committee to consider the issue.

The case concerned CPR 45.29I(2)(h), which allows additional claims for disbursements beyond the fixed fee to be claimed in cases where they are “reasonably incurred due to a particular feature of the dispute”.

The appeal court ruled that counsel’s fees for an opinion on quantum in a road traffic accident involving a child that fell out of the portal were included in the fixed costs. Lord Justice Coulson said the fact the claimant was a child was not “a particular feature of the dispute” because it was a personal characteristic which had “nothing whatever to do with the dispute itself”.

True Solicitors, who acted for the claimant, instructed Nicholas Bacon QC of 4 New Square and Andrew Granville Stafford of 4 King’s Bench Walk to draft the application to appeal to the Supreme Court.

They argued that the Court of Appeal decision created an anomaly: a defendant in a portal case who admitted liability would, at stage three, pay a fixed cost of £150 for an advice on quantum where the claimant was a child.

But if the same defendant disputed liability and the claim proceeded under section IIIA of part 45, he would avoid paying that fee.

They also pointed out the effect the Court of Appeal’s decision has on those who, because of their disabilities, incurred extra expenditure in relation to a claim.

Their arguments were supported by the Personal Injury Bar Association and Association of Personal Injury Lawyers, both of which would have sought to intervene in the appeal had permission been granted.


Number of PI hearings halves in lockdown
The number of hearings in personal injury cases has halved since lockdown began, a survey of chambers by the Personal Injuries Bar Association (PIBA) has found.

Data from 23 of the main personal injury sets across the country showed that the average weekly number of hearings which have taken place post-lockdown has halved from an average of 67 per chambers pre-lockdown to 34.

PIBA chair Steven Snowden QC pledged to use the findings “as far and as forcefully as we can” to lobby the courts service and others to increase the number of hearings, and to assist the Bar Council in illustrating “the problems the profession is facing from the downturn in civil work and try to improve government financial assistance”.

Mr Snowden said PIBA and the Bar Council had “some success” last week in having the civil listing priorities for the county courts adjusted, “but we will continue to press for further revisions so that, for example, there is a positive presumption that CCMCs etc should take place”.


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