Kerry Underwood

COSTS UPDATE: THREE NEW CASES: GROUP LITIGATION ORDERS, COURT OF PROTECTION AND DISCONTINUANCE

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Indemnity Costs of Premature, Uncoordinated GLO Application Awarded Against Claimants

In Crossley v Volkswagen Aktiengesellschaft and others (VW Nox Emissions Group Litigation) [2018] EWHC 2308 (QB) (4 September 2018)

a Senior Master of the High Court held that an application for a group litigation order (GLO) had been made prematurely and awarded indemnity costs against the claimants in relation to the costs of preparing for, and attending, a number of hearings, including the adjourned hearing of the GLO application.

The costs are said to be around £450,000.

The claimants had issued the GLO application in November 2016, but it was only heard in March 2018.

In the meantime, there had been satellite litigation between two main law firms seeking to represent the claimants, requiring determination at an expedited trial.

The defendant argued that, in light of matters including the satellite litigation, it had been premature for the claimants to make and progress the GLO application, resulting in unnecessary hearings and costs; the claimants had significantly breached settled principles and practices regarding the commencement and progression of group claims by, among other things, proceeding prematurely, in an uncoordinated way and failing to provide a notional lead lawyer who could speak with the authority of the coordinated group.

 

In reaching her decision, the Senior Master explained that:

 

  • While not every issue had to be agreed and a draft order finalised before a GLO could be sought, the court expected the claims to be at a stage where the GLO issues and any differences between the claimants’ claims could be identified, as well as the position on funding and costs.

 

Different firms of claimants’ solicitors should have agreed a common approach, a solicitors’ group should have been formed and lead solicitors identified.

 

  • Insufficient time had been allowed for pre-action exchanges.

 

It was not possible for the court to deal with the GLO application on the state of the evidence and information before it.

 

It was obvious that the hearing would need to be adjourned, as the claimants conceded at the hearing.

 

  • There were no limitation reasons for issuing prematurely and even if there had been, they could have been dealt with by agreement or, if that was not possible, by issuing proceedings and seeking a stay.

 

  • The timing of issuing the GLO application was a commercially driven decision linked to the funding arrangements sought by one of the firms vying to represent the claimants: it was not for the claimants’ benefit.

 

 

  • A number as aspects of this case took it “outside the norm” and therefore an award of indemnity costs was appropriate.

 

The judgment contains useful guidance in relation to applications for group litigation orders.

 

“85. It is not the case that the court expects all issues to have been agreed and a final formulation of the draft GLO to be in place by the time of the application or the hearing. Although in many GLO applications the draft GLO is wholly or substantially agreed, in a significant number there are still issues not agreed that need to be determined by the court. However, the claims need to be at a stage where GLO issues can be identified, and where some claimants may have different claims in law, these need to be identified so that the court can decide whether they should be included in the GLO or dealt with outside the GLO. Proper vetting of claims must have occurred so that weak or unmeritorious claims can be weeded out. Satisfactory funding of the litigation and ATE insurance (or other demonstration of an ability to pay adverse costs orders) needs to have been arranged, or at least be some way towards that being achieved. The common and individual costs provisions of the draft order need to have been discussed and agreed if possible. This is usually an area capable of agreement in most cases. A realistic timetable for service of GPOC and a Generic Defence needs to have been discussed. The different firms of claimant solicitors need to have had substantial discussions so that a common approach can be agreed if possible, and if not the issues of difference, and the reasons for them, identified. The formation of a Solicitors Group needs to be discussed and agreed, and identification, and agreement if possible, of lead solicitors. The defendants need to be involved in discussions once there is a sufficiently identified common approach, or differences of approach are capable of being identified. If there are limitation issues agreement for stays pending the GLO need to be canvassed, and applications made if agreement cannot be reached. The court needs a substantial amount of information before it can determine such issues.

  1. I reach the conclusion that the GLO application in this case was issued prematurely. For such a major piece of litigation there was simply not enough time allowed for preaction and pre- application correspondence with other Claimant groups and with the Defendants. The state of disarray in which the application reached me at the hearing on 30 January 2017 made that conclusion all too obvious. As I commented at the hearing, it was simply not possible for the court to have dealt with the GLO application on the state of the evidence and information before it. It was clear to me when reading the papers submitted for that hearing over the weekend before it was due to be heard, that there was no possibility that the application could be dealt with and that the VW Defendants’ application for an adjournment was, unless there was some development that I was unaware of, bound to be successful. When the hearing commenced on the morning of Monday 30 January 2017 the Relevant Claimants conceded that there would have to be an adjournment. That conclusion should have been reached by the Relevant Claimants at a much earlier stage.”

 

Comment

Is there any point in group litigation orders?

Would matters not be best left to the courts’ general case management powers?

This case is not much of an advertisement for the legal profession or for claimants’ solicitors.

 

Rare Costs Order Against Local Authority In Court of Protection

In London Borough of Lambeth v MCS (by her litigation friend the Official Solicitor) (1); and Lambeth CCG (2)[2018] EWCOP 20)

the Court of Protection, part of the High Court, took the exceptional decision to make a costs order.

The order was made against the London Borough of Lambeth and Lambeth Clinical Commissioning Group, both public bodies.

The subject of the Court of Protection order was a 55 year old woman from Colombia who collapsed in the street in the United Kingdom in 2014 and after that had cognitive problems and was transferred to hospital and remained there.

The lady wanted to return to Colombia and could not speak English and the London Borough of Lambeth applied to the Court of Protection.

The High Court Judge was very critical of both the London Borough of Lambeth and the Lambeth Clinical Commissioning Group saying:

 

“It is obvious that this Court is deeply critical of the manner in which this case was handled both before and after the institution of proceedings. It is further troubling that even within the written submissions are many misconceived assertions or contentions as to fact.”

 

and

 

“To submit that the CCG [Clinical Commissioning Group] was “throughout commendably assiduous” in seeking the return to Colombia is about as misplaced and offensive a submission as could possibly be contemplated.”

 

The judge said that the subject of the Court of Protection proceedings should have been repatriated to Colombia “years earlier, rather than being kept caged in an environment and jurisdiction where she was so obviously unhappy and did not belong”.

 

The judge concluded:

 

“5. Without hesitation I conclude that the circumstances of this case are so poor and so extreme (both in relation to institution of proceedings and their subsequent conduct) that I should make an order that the costs of the proceedings should be born by the Applicant and Second Respondent. It is submitted to me (at paragraph 2) that the Court is asked to consider that whilst the Applicant was a party throughout, the CCG only being joined towards the end of the proceedings, it was the CCG who was the decision maker. I am not entirely clear what is being submitted here, Ms Rowlands represents both, and I am unable to make any apportionment. They are both public bodies, I simply make an order against both jointly and severally.”

 

This is a very short judgment – just one and a half pages – and is well worth reading.

 

Discontinuance: Rare For Usual Rule to Be Disapplied 

In BAE Systems Pension Funds Trustees Ltd v Bowmer & Kirkland Ltd and Ors [2018] EWHC 1222 (TCC)

the Queen’s Bench Division of the High Court followed the usual rule that a discontinuing claimant must pay the defendant’s costs.

Here, the claimant discontinued against the second defendant, but sought an order that the costs of the second defendant be paid by the first defendant, rather than the claimant.

The court refused, and ordered that the usual consequences of CPR 38.6 should apply, that is that the claimant pay the costs of the defendant against whom it had discontinued.

The fact that, due to limitation issues, the claimant had sensibly issued against all possible defendants in circumstances where the claimant was unclear about the financial or insurance position of the potential defendants, made no difference.

The court said that it had a wide discretion under CPR 44 and was free to make such an order, although there was no authority on the point, but in any event it declined to do so.

The court gave as an example of where such an order might be appropriate, as where a claimant had been positively misled by the defendant into suing another defendant.

Some guidance could be obtained from the approach to Sanderson orders, that is where an unsuccessful defendant pays the costs of a successful defendant direct, and here the court referred to the decision of the Court of Appeal in

 

Irvine v Commissioner of Police for the Metropolis [2005] 3 Costs LR 380,

 

where it cited, with approval, this passage from the first instance decision:

 

“It does seem to me that this is a case where, as in all cases, parties and their legal teams have to take a careful and close look at the basis on which they seek to bring in another party to proceedings and to make a judgment for themselves on the basis of the information available to them as to whether or not they are likely to succeed in claims against those parties. They cannot expect, simply because one party seeks to lay the blame at the door of another, that they can necessarily pursue that other party at the expense of the one who is pointing the finger. Parties must give careful thought to how they are going to pursue their claims”.

 

Comment

It will be very rare for the usual rule on discontinuance, that is that the discontinuing party pays costs, to be disapplied.

It should be noted that even in Qualified One-Way Costs Shifting cases, where discontinuance occurs, a costs order is invariably made against the claimant in the usual way, and the issue then is as to whether or not that order can be enforced against the claimant.

 

 

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Written by kerryunderwood

September 21, 2018 at 8:10 am

Posted in Uncategorized

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