Costs News

03 September 2020
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High Court rules on recovery of costs after debate over true successful party

A claimant who only recovered a small proportion of the damages sought after the court preferred the defendant’s expert was the successful party but should not recover all of his costs, the High Court has ruled.

Richard Hermer QC, sitting as a deputy High Court judge, said an award of 100% of costs would be unjust.

The substantive ruling concerned the medical and financial consequences of a 10-month delay in the diagnosis of the claimant's HIV status. The defendant accepted that it was liable to compensate the claimant for the ill health he suffered during that period and for a period of time thereafter when his weakened immune system meant he succumbed to pneumonia and then tonsillitis, both requiring brief hospitalisation.

Mr Hermer ruled that the delay in diagnosis was not responsible for the claimant's discharge from the Army and that it had no long-term adverse impacts on his health.

The claimant had sought general damages of £120,000 plus £400,000 for past and future loss. He was awarded £20,000 in general damages and a small sum for his wife’s care of him during the period. Shortly before trial, the defendant made a part 36 offer of £60,000.

It was agreed the claimant had to pay costs from the expiry of the offer on 7 May 2020 – as he was insured, there was no set-off against damages. The question in Jones v Ministry of Defence [2020] EWHC 1987 (QB) was who should pay the costs up to then.

The defendant contended that it was the successful party – given that the judge preferred its expert and so the claimant only recovered a small percentage of the damages claimed – and accordingly it should recover 90% of its costs.

The claimant submitted that he was the successful party – though he recovered less money than claimed, he said it was still a significant amount and one that justified continuing the proceedings in the absence of any offers. Further, the defendant did not admit the date on which it should have diagnosed his condition until shortly before trial, and failed to engage with settlement discussions until close to the commencement of trial.

The claimant argued for all of his costs and opposed the defendant’s alternative suggestion of an issues-based cost order.

The judge said it was not “clear and obvious” which party had won, but overall neither quantum nor the outcome of discrete issues were the deciding factors.

“In my view, the claimant should be deemed to have succeeded in his claim in substance and reality. The claim sought compensation for the failure to timeously diagnose his HIV and the trial resulted in receipt of an award for precisely that omission. It was not, in my view, unreasonable for the claimant to have pursued the claim even for the more modest consequences of a late diagnosis.

“It was, of course, a far lower award than that sought but, prior to the making of the part 36 offer, the claimant faced a choice of either dropping his claim or pursuing it. It cannot be said that pursuing a medical negligence claim for the limited impact (as found) of the delayed diagnosis was unreasonable.”

The judge did not accept the defendant's submissions that its late admission had no impact on quantum and said it was “somewhat difficult to understand” why it only made the part 36 offer so late, given that it admitted negligence, albeit with limited causal impact, in its defence of July 2018.

It was, Mr Hermer concluded, reasonable of the claimant to bring proceedings even for the relatively modest amount awarded by the court.

However, the defendant's arguments were sufficient to demonstrate that it would be unjust for it to pay for all the claimant's legal costs. “In short, I far preferred the relevant expert evidence submitted by the defendant with the result that the award of damages was very far below that sought. An award of 100% of the claimant's costs in these circumstances would be unjust and therefore a departure from the general rule is justified.”

The judge declined to make an issue-based cost order: “Orders of this nature can present an unnecessary and disproportionate burden in detailed assessments where many of the issues (here negligence, causation and loss) materially overlap with each other and are difficult to unpick fairly. If the general rule is being departed from, then it is generally preferable to make orders expressed in percentage terms, or references to distinct periods of time (see Multiplex Constructions [2008] EWHC (per Jackson J at §72).

“Indeed, reinforcing this principle, CPR 44.2(7) provides that before considering making an issue-based cost order, the court should consider whether it would be practicable to make an order for payment of a 'proportion' of costs. I consider that such an approach is practicable here.”

He ruled that the appropriate order was for the claimant to recover 60% of his costs.

Simon Wheatley (instructed by Russell-Cooke) for the claimant, with Russell Fortt (instructed by the Government Legal Department) for the defendant.

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