MXX v United Lincolnshire NHS Trust  EWHC 1624 (QB)
solicitor overstated their hourly rates in their costs budget. Following the
conclusion of the matter the Defendant applied for a sanction under CPR Part
44.11. In the SCCO the Costs Judge held that it was improper:
- to include incurred
costs in a budget comprising anything other than time multiplied by agreed
- to claim more than a
client was obliged to pay.
However, the Costs
Judge did not accept that failures to revise the budget before or at the CCMC
were further acts of improper conduct.
The Defendant appealed and six of nine grounds of appeal succeeded. The consequence is that the Master carrying out the detailed assessment will now decide whether the substantial overstatement of the hourly rate in the budget is a ‘good reason’ (within the meaning of CPR 3.18) for departing from the budget so as “to correct any injustice caused by [the] improper conduct”.
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Hammond v SIG plc & Subsidiary Companies  EWHC B7 (Costs)
The claim started in the portal and was
subsequently resolved under Part 36. The SCCO found that the Claimant was
entitled to fixed costs only despite arguing for an ‘escape’ from fixed costs under
CPR 45.29J (i.e. “exceptional circumstances”).
The case is notable because the SCCO cited only one authority in which exceptional circumstances have been made out: “The only finding of exceptional circumstances produced by either party, notwithstanding the very substantial number of cases that are taken through the Portal each year, was … Jackson v Barfoot Farms, an unreported decision … and which is helpful if only as a contrast to the case before me. That particular case proved (as the Judge found) to be very complicated and settled for some £350,000. I would respectfully agree … that that case was indeed exceptional, but none of those considerations apply here”.
This case affirms what we already know: that the
test of exceptionality is indeed a high bar.
Click here to view the full text of our July “Costs Alerter” in which we consider how a party may (or may not) revise and/or depart from an approved or agreed budget.
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Ferri v McGill  EWHC 952 (QB)
The claim was
initially run under the pre-action protocol for low value personal injury road
traffic accidents. After settlement (pre-issue) the claimant sought more than
fixed costs. The rules mandate fixed costs in Protocol cases, subject only to allocation
to multi-track or exceptional circumstances (r. 45.29J). At first instance the
Master allowed an escape from fixed costs by setting a ‘low bar’ for
exceptionality, finding that circumstances took the case out of the general run
of cases which the Portal was intended to cover.
appealed, and the test of exceptionality was (re)affirmed as a high one, the
Judge stating that “policy reasons … in fixed costs [cases] …, while
allowing for ‘exceptional circumstances’ to depart from the regime, require a
more strict, not a ‘low bar’, approach”.
The case has been
sent back to be reassessed by another Master.
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Calonne Construction Ltd v Dawnus Southern Ltd  EWCA Civ 754
Two questions arose
on appeal: (1) was a Part 36 offer invalidated by inclusion of a counterclaim
yet to be pleaded?; and (2) did the inclusion of a term as to interest (8% per
annum after expiration of the offer) render the Offer invalid?
The Court of Appeal
found that it did not matter that the counterclaim had not been pleaded. The
Court noted that the purpose of Part 20 is to enable counterclaims to be
managed effectively and conveniently. Nothing exempts counterclaims from the
provisions of Part 36. A proposed counterclaim is treated as a claim for
the purposes of Part 36.
Part 36.7 provides
that a Part 36 offer can be made at any time, including before the commencement
of proceedings. Therefore, the offer could not be invalid because the
counterclaim had not been pleaded. To rule otherwise would mean that a
defendant would have to go to the expense of pleading a counterclaim in order
to make a Part 36 offer.
The inclusion of a
term as to interest after the end of the Relevant Period did not
invalidate the offer (although Part 36 offers will be treated as inclusive of
interest until the Relevant Period expires).
Cathay Pacific Airlines Ltd v Lufthansa Technik AG (2019) EWHC 715 (Ch)
court has jurisdiction under s.51 of the Senior Courts Act 1981 and Part 44.2
to make a costs order in a foreign currency. There is no basis for reading into
the court’s wide costs discretion a restriction that an award must be in
sterling. The costs of a failed summary judgment application were assessed in
the Defendant’s favour in the sum of €25,000.
should be given, where summary assessment is sought in a foreign currency,
together with a figure representing the sterling equivalent. There is no
prescribed way to give this information – it may be by way of form N260
(statement of costs), written submissions and, if appropriate, by way of a
Bruce and Bruce-Daly v Thomas Cook Tour Operations (Unreported)
One-way Costs Shifting) provides that a bona fide, losing claimant will
not have to bear a defendant’s costs unless the defendant can satisfy one
of the exceptions in the CPR.
In this case, the
Claimants, relying on the Package Travel Regulations 1992, brought proceedings
for breach of contract. In the course of the claim the Claimants’ solicitors
ceased acting and, from that point onwards, the Claimants failed to comply with
directions which resulted in the claim being struck out due to the Claimants’
failure to pay the trial fee.
the issue of costs, the Defendant submitted that QOCS should be disapplied on
the basis that the Claimants’ conduct generally, including non-payment of the
trial fee, had obstructed the just disposal of proceedings. The Judge
considered that the Claimants’ conduct, in failing to comply with court orders
coupled with the failure to pay the trial fee, was sufficient for the exception
at CPR 44.15 to apply and the Judge disapplied QOCS and awarded the Defendant
its full costs.
A consultation, that fixed costs (i.e.
where the amount of costs recoverable at the end of a case is fixed by Rule
rather than assessed by court) should apply to most civil cases worth up to £100,000, will end on 6
Clinical negligence cases and
claims in the business and property courts are excluded from the proposals, but
all other civil claims in the fast track are intended to come into scope. The
proposals take forward recommendations made two years ago by Lord Justice
Jackson, who advocated fixed costs for all fast-track cases and a new
‘intermediate track’ for certain claims up to £100,000. It is not proposed to
bring forward a new track but it is proposed that the fast-track be extended.
As the MoJ considers that
Part 36 works well (encouraging settlement by applying higher costs where an
offer is made but not beaten at trial) it is proposed that there should be a
35% uplift on fixed costs in Part 36 cases.
may be an opportune time to recap the existing regime in Part 45 of the Civil
Procedure Rules which provides for fixed recoverable costs in:
- Section I – proceedings in which early judgment is entered
- Section II – costs only proceedings or approval of settlement in RTA cases where agreed damages do not exceed £10,000, and to which neither Section III nor Section IIIA applies
- Section III – claims pursued under the Pre-Action Protocols for Low Value PI Claims in RTA and Low Value PI (Employers’ Liability and Public Liability) Claims. Essentially, personal injury claims valued at up to £25,000.
- Section IIIA – claims which started under the above protocols but exited them (because liability was not admitted) provided the claim is not allocated to the multi-track
- Section IV – proceedings in the Intellectual Property Enterprise Court
- Section V – County Court claims conducted by officers of HM Revenue and Customs
- Section VI – which fixes the costs for fast track trials
- Section VII – Aarhus Convention claims.