Fri, 20 Dec 2019
As we approach the festive break my thoughts are drawn to a particularly climactic quadrilogy. No I’m not thinking of putting my feet up with a Bruce Willis movie marathon, but rather the rapid fire last few months the Court of Appeal have had on the issue of costs. We have seen no less than four decisions concerning either QOCS, Part 36 offers, fixed costs or a mixture of the above.
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I start with Brown –v- Commissioner of Police of the Metropolis [2019] EWCA 1724[1] handed down on 18 October 2019. Here the Court gave judgment in a long running ‘mixed’ claim brought against the Metropolitan Police Service in circumstances where the Police unlawfully obtained and used private information about the Claimant and her daughter. The Claimant not only sought damages for personal injury, but additionally damages for breach of the Data Protection Act 1998; Human Rights Act 1998; allegations of misfeasance in a public office and misuse of private information.
When judgment in the claim was originally given in 2016, the Claimant succeeded in relation to the misuse of private information claim, partially succeeded in respect of her personal injury claim (but failed to beat the Defendant’s Part 36 offer) and lost in all other aspects of her claim.
Overall the Claimant was awarded £9,000 in damages but was ordered to pay a substantial proportion of the costs incurred by the Police. The Claimant successfully persuaded the trial judge that she was protected by the QOCS regime against any adverse costs over and above the £9,000 she received in damages, thus creating neutrality for her.
The Police appealed to Whipple J who gave judgment in 2018. She disagreed with the trial judge and held that since the claim included matters other than relating to personal injury, the exemption to QOCS at CPR 44.16(2)(b) was triggered.
It was therefore open to the Court to determine the extent to which it was ‘just’ to enforce the costs order made against the Claimant in a ‘fair and flexible fashion’, eventually deciding that QOCS protections should only be provided in relation to the costs attributable to the personal injury claim, with the costs attributable to the other elements being fully enforceable.
The Claimant appealed. Affirming the decision below, Coulson LJ gave the unanimous Judgment confirming the ‘sensible and straightforward’ interpretation was that only where claims are confined to the three types set out at CPR 44.13(1) will the ‘automatic nature of the QOCS protection’ apply.
The Court went on to pose an important question of what will happen in RTA litigation? In such cases there are often claims such as vehicle damage or credit hire than are persued alongside claims for personal injury. Confirming the same logic, it was held that the presence of those elements must also trigger the exemption.
Before unsuccessful Claimants start running for cover, the Court helpfully went on to say, [57] “..the fact that there is a claim for damages in respect of personal injury, and a claim for damage to property, does not mean that the QOCS regime suddenly becomes irrelevant. On the contrary, I consider that, when dealing with costs at the conclusion of such a case, the fact that QOCS protection would have been available for the personal injury claim will be the starting point, and possibly the finishing point too… If (unlike the present case) the proceedings can fairly be described in the round as a personal injury case then, unless there are exceptional features of the non-personal injury claims (such as gross exaggeration of the alternative car hire claim, or something similar), I would expect the judge deciding costs to endeavour to achieve a ‘cost neutral’ result through the exercise of discretion”. Largely the status quo then.
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In Cham –v- Aldred [2019] EWCA Civ 1780[2] handed down on 25 October 2019 the Defendant successfully appealed a decision originating from Nottingham’s Regional Costs Judge Hale which had been affirmed by at first appeal by now recently retired HHJ Owen QC.
The Claimant was a child who had been injured in an RTA. Liability was initially disputed causing the matter to fall outside of the portal procedure. The Defendant ultimately went on to accept liability and sought to settle the claim. As required by CPR 21 PD5.2(1), the Claimant’s solicitor obtained an advice from counsel as to quantum.
Based upon that advice, the offer was accepted and Part 8 proceedings were issued in accordance with CPR 21.10(1) for approval, which was granted. The appropriate fixed costs regime was therefore Section IIIA of CPR Part 45 where in this case the costs of counsel’s advice was claimed as a disbursement ‘reasonably incurred due to a particular feature of the dispute’ in accordance with CPR 45.29l(2)(h). Both at first instance and on appeal, the Court agreed with the Claimant.
The Defendant appealed again, this time successfully. Coulson LJ giving the lead judgment and disallowing the recovery of counsel’s fee held [35] “…The fact that, in a particular case, a claimant is a child, or someone who cannot speak English, or who requires an intermediary, is nothing whatever to do with the dispute itself. Age, linguistic ability and mental wellbeing are all characteristics of the claimant regardless of the dispute. They are not generated by or linked in any way to the dispute itself and cannot therefore be said to be a particular feature of that dispute”.
[37] “…the cost of counsel's advice in the present case was not necessitated by any particular feature of the dispute, and was instead required because it is an almost mandatory requirement in all RTA cases where the claimant is a child. It was therefore caused by a characteristic of the claimant himself and does not fall within the exception”.
Given that the case before the Court dealt solely with the question of counsel’s fees, the conclusions in respect of translation fees must be considered obiter. In my mind it raises significant issues red flags in respect of discrimination (not argued before the Court). Since the net result will be that a Claimant who is not able to understand spoken English either through disability or otherwise, will be at a financial disadvantage to those Claimants who can (and as such don’t have to pay for such services out of their own funds) there would appear to be a lack of equality.
We will have to wait and see if and how these points are developed. In the meantime, however, it would appear to be the end of the inter partes recoverability of counsel’s fees for drafting approval advices in the context of these fixed costs.
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On 19 November 2019 the Court of Appeal handed down judgment in Ho –v- Adelekun [2019] EWCA Civ 1988[3]. This appeal concerned a perhaps opportunistic attempt by the Claimant to avoid the fixed costs regime entirely in circumstances where the Claimant accepted an offer purportedly made in accordance with CPR Part 36. The offer included provision for the payment of costs with ‘such costs to be the subject of detailed assessment if not agreed’ in accordance with CPR 36.13 (rather than the usual fixed costs provision at CPR 36.20).
The Claimant argued that rather than her entitlement to costs being limited to the fixed costs allowable at Section IIIA of Part 45, the parties had a reached a contractual agreement for standard ‘hourly rate’ assessed costs.
Although the Claimant was unsuccessful at first instance, on her appeal to HHJ Wulwik it was found that the contractual agreement ‘was not an agreement to pay costs on the usual basis of fixed costs, but on the standard basis’ and determined that the assessment of costs was properly at large.
The Defendant then appealed. In allowing that appeal, the Court concluded that the offer was clearly intended to be a Part 36 offer, such that the usual fixed costs consequences in accordance with CPR Part 36.20 should still apply.
The Court was not persuaded that either the reference in the agreement to assessment by ‘detailed assessment’ or the inclusion of CPR Part 36.13 was sufficient to find that there had been contractual departure from fixed costs in the offer.
Whilst it is permissible for offers to be made to settle on any terms as to costs, should it depart from the fixed costs consequences we are reminded that such an offer will no longer be regarded as a compliant Part 36 offer permitting the usual automatic consequences.
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Last but by no means least I turn to the decision in King –v- City of London Corporation [2019] EWCA Civ 2266[4] handed down on 18 December 2019. This case answered the question of whether an offer said to be inclusive of interest can be made pursuant Part 36 at all.
Here the Court of Appeal resolved conflicting authorities on the issue; on the one hand in this case with HHJ Dight CBE affirming the decision of Deputy Master Campbell that offers said to be ‘inclusive’ cannot be a valid Part 36 offer; and Nicol J concluding in Horne –v Prescot (No1) Ltd [2019) EWHC 1322 (QB) that such an offer can be an effective Part 36 offer.
In a majority decision, the Court of Appeal noted that, [25] “an offer which fails to comply with the requirements of CPR Part 36 in an essential respect will not take effect as a Part 36 offer even if it is expressed to be one”.
Again we are reminded of the ‘mandatory’ nature of the components of Part 36. CPR 36.2 requires absolute compliance with CPR Part 36.5 of which CPR 36.5(4) states that, any offer to pay a sum of money "will be treated as inclusive of all interest".
It is noteworthy to mention that whilst Arnold LJ ‘reluctantly’ allowed the appeal he recommended that the point should be considered by the Rules Committee, “In my opinion there are arguments in favour of permitting Part 36 offers to be made which are exclusive of interest, at least in assessment proceedings if not in the general run of claims”.
[1] https://www.bailii.org/ew/cases/EWCA/Civ/2019/1724.pdf
[2] https://www.bailii.org/ew/cases/EWCA/Civ/2019/1780.pdf
[3] https://www.bailii.org/ew/cases/EWCA/Civ/2019/1988.pdf
[4] https://www.bailii.org/ew/cases/EWCA/Civ/2019/2266.pdf
