Costs News

04 February 2016
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Court issues costs sanction over non-compliance with orders

The High Court has again issued a costs penalty over poor conduct in litigation to send out a message on the importance of compliance with court orders.

Mr Justice Males reserved the costs of the preliminary issues he had just ruled on, subject to the proviso that the claimant must in any event bear the costs of preparing of an expert report that included material it was not meant to and 80% of the costs of preparing many unnecessary bundles for the preliminary hearing, regardless of the future course of the litigation.

He had been urged to reserve the question of costs until the end of C&S Associates UK Ltd v Enterprise Insurance Company PLC[2016] EWHC 67 (Comm) – on the basis that both the expert evidence and bundles could by then have become relevant.

But he said it was “necessary in my judgment to mark the disapproval by the court of the course taken by C&S and, moreover, to do so now rather than waiting until the end of this litigation”.

The expert report had included evidence which Males J said had been served without permission, and he required a version to be served with these paragraphs deleted.

“The inclusion of this material in [the expert’s] report was a deliberate decision, either by C&S itself or by those acting for it. [The expert’s] evidence was that he included this section of his report because he was instructed to do so by C&S’s solicitors, Sidley Austin. It more than doubled the length of the report and increased unnecessarily the costs of the preliminary issues.”

He continued that C&S “insisted” on producing 29 bundles for the hearing. “Only one of these bundles was even opened during the trial and, when it was, the reference was extremely brief and added (with respect) nothing at all to any understanding of the case.

“It is true that disclosure of the documents contained in these bundles had been ordered, but it does not follow that it was reasonable, let alone necessary, for these to be included in the trial bundles. Inevitably, this also increased the costs of the preliminary issues.

“It is not at all obvious that the redacted passages from the report will form part of the next phase of the litigation but, in any event, it is necessary in my judgment to mark the disapproval by the court of the course taken by C&S and, moreover, to do so now rather than waiting until the end of this litigation.

“It is important that those litigating in this court are aware of the need for compliance with orders made regarding expert evidence; that, so far as possible, the costs of such evidence will not be allowed to spiral out of control; and that a party who deliberately chooses for tactical reasons to adduce expert evidence for which in large part no permission has been given should bear the risk that, in appropriate circumstances, the costs of preparing such a report may be entirely disallowed…

“Much the same reasoning applies to the preparation of the trial bundles, although I acknowledge that approximately 20% of the bundles would have been required in any event.”

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