Interim payments—the court is willing, but the evidence is weak (RXK v Hampshire Hospitals NHS Foundation Trust)

Wed, 04 Dec 2019

Personal Injury analysis: This analysis considers Master Cook’s judgment in RXK in which he sets out the circumstances in which the court will order an interim payment despite final quantification still being some years hence. It explains why this will be welcome news for claimant solicitors, even though no substantive decision was given in the case.
Written by Stephen Goodfellow, barrister, at No5 Chambers.

RXK (a child proceeding by her mother and litigation friend) v Hampshire Hospitals NHS Foundation Trust [2019] EWHC 2751 (QB), [2019] All ER (D) 142 (Oct)

What are the practical implications of this case?

Master Cook’s judgment in RXK reiterated the decision of Hull & East Yorkshire Hospitals NHS Trust [2019] Lexis Citation 21, the most important practical implications of both decisions being that the court is willing to make:

• an order for payment on account of costs where there will not be detailed assessment in the near future
• numerous payments on account of such costs, as they accrue prior to final quantification of a claim, so called ‘prospective’ or ‘anticipatory’ costs orders

In fact, the court expects in such cases for the other party to make sensible voluntary payments even though they are in respect of an issue which has not been concluded.
This is an important benefit for claimant solicitors as the court is amenable to ensuring adequate cash flow, through tranches of costs payments, in lengthy and costly cases involving individuals as well as groups of claimants, where liability has been admitted but final quantification will take many years.
This will, obviously, not apply where there are relevant CPR 36 offers from the defendant, which result in the court not being satisfied that the claimant will receive the costs claimed and that the payment on account will not exceed a reasonable proportion of recoverable costs.

What was the background?

The claimant’s litigation friend brought a high value clinical negligence claim against the defendant as a result of neurological injuries caused at the time of the birth due to a delay in her delivery. On 2 November 2016 proceedings were issued. On 25 July 2017 judgment was entered for damages to be assessed together with an order that the defendant pay the claimant’s liability costs and a further payment on account of those costs in the sum of £50,000. Subsequently, the claimant applied for a payment of £150,000 on account, in respect of quantum costs. The application was brought, even though there had been no order in respect of quantum cost, on the basis that there would likely be significant further delay of at least three to four years before quantum was finally resolved. The claimant provided a schedule of costs for liability and quantum costs totalling £410,136.88. The total payments on account of £250,000 would equate to just over 60% of the costs schedule.

What did the court decide?

The court highlighted that the discretion expressed in CPR 44.2 is very wide, but under CPR 44.2(8) the court can only make an interim payment on account of costs where it has made a costs order which could be subject to detailed assessment. Master Cook determined that the claimant should have requested an order for costs down to a specific date, and then an interim payment on account of those costs.

In this case the claimant had failed to present sufficient information to enable the court to take into account the facts at CPR 44.2(4) and (5), namely all the circumstances, including:

The conduct of all the parties

• whether a party has succeeded on part of its case, even if that party has not been wholly successful, and
• any admissible offer to settle made by a party which is drawn to the court’s attention, and which is not an offer to which costs consequences under CPR 36 apply
The conduct of the parties will involve
• conduct before, as well as during, the proceedings and in particular the extent to which the parties followed the Practice Direction–Pre–Action Conduct or any relevant pre-action protocol
• whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue
• the manner in which a party has pursued or defended its case or a particular allegation or issue, and
• whether a claimant who has succeeded in the claim exaggerated its claim

Consequently, a substantive decision was not made and the parties were permitted to file a further witness statement and apply to re-list the application.
Perhaps of greater note, in his judgment Master Cook approved and re–iterated the County Court decision of Hull & East Yorkshire Hospitals NHS Trust [2019] Lexis Citation 21 in which HHJ Robinson held that the court can order a payment on account of costs, even where there will not be a detailed assessment until the end of the case some years away.
It will be interesting to see what order Master Cook makes when this application is re–listed.

Case details

• Court: England and Wales High Court (Queen’s Bench Division)
• Judge: Master Cook
• Date of judgment: 21 October 2019

Interviewed by Jenny Rayner.
The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.

This article was first published by Lexis®PSL on 30/10/2019.

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