A master has refused to order an interim costs payment in a high-value personal injury case where much of the evidence has yet to be served and there have been early part 36 offers.
Master Brown said such an order would diminish the security for the defendant’s costs.
NAX v MAX and Anor [2021] EWHC 3492 (QB) relates to a motorcycle accident in January 2017 which caused multiple injuries, including a brain injury, and also led to a below-knee amputation of the claimant’s right leg. The defendant has made two allegations of contributory negligence in relation to the head and knee injuries respectively.
The claim, currently valued at £8m, is funded through a conditional fee agreement with after-the-event insurance providing an indemnity for adverse costs orders and the claimant’s disbursements up to £100,000. It was said that the conditions necessary for payment as between solicitor and the claimant’s litigation friend would have been met were an interim payment of costs made.
Proceedings were issued in December 2019 and the claim form served in April 2020. Judgment has been entered for primary liability against the defendant and his insurer, with the trial due this spring.
The claim has not yet been costs budgeted, although budgets have been served. The claimant’s total costs are put at around £1.2m and the defendant’s at £495,000.
The claimant asked the master to make, effectively, orders as to the costs of the action and then an interim payment.
However, Master Brown said that, in terms of the evidence to be relied upon at trial, “we are at early stage in this case”.
“I have not seen any witness statements in the matter or a police report (although I assume one has been produced), and disclosure has not occurred. The medical evidence is also at an early stage, particularly and perhaps most significantly in relation to the head injury.”
As a result, he was “not satisfied to the high degree of confidence necessary that I should at this early stage, and on the limited evidence available, make the final orders sought”.
He added: “I do not think I can be satisfied that a trial judge will not consider it appropriate to make a different order, or at least one which is not consistent with the order that I am asked to make. The trial judge will be in a much better position to consider the factors set out in CPR 44.2 above which include conduct before but also during proceedings.”
Even if he was wrong about this, it would not be appropriate to make an interim order given the three early part 36 offers that have so far been made in the case, the judge continued. This was because the effect of doing so “would be to diminish the security in respect of a potential future set-off of the defendants’ costs against costs or damages due to the claimant”.
Master Brown said: “I do not underestimate the difficulties or expense of funding disbursements in a claim such as this, whether the funding is by the solicitors themselves or a disbursement funding loan. But the period in this case between the incurring of disbursements (to the extent that experts require up-front payment) is not unusually protracted.
“It is reasonable to anticipate that the costs of liability issues alone up to the date of expiry of the first offer would be modest given the work described (and it is difficult to see that any substantial costs were incurred in respect of the issue of primary liability).
“Even if I were to allow some quantum costs (noting the date of some of the reports served), the work done at this stage was preliminary in nature and I would have had in mind a modest fraction of the sum sought.”
Anthony Reddiford (instructed by Lanyon Bowdler) for the claimant. Hugh Hamill (instructed by Keoghs) for the defendant.