Kerry Underwood

ISSUE-BASED COSTS ORDERS

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In October I am delivering my new course – Getting the Retainer Right – in 7 cities – details and booking form here.

In Welsh v Walsall Healthcare NHS Trust (Costs) [2018] EWHC 2491 (QB)

the Queen’s Bench Division of the High Court, in making a costs order in a clinical negligence claim departing from the general rule that the “loser pays”, has provided useful guidance on issue-based costs orders, reviewing the authorities and rules in detail.

The High Court endorsed the approach set out in the notes of the White Book at paragraph 44.2.10 summarised below.

The rules do not require that an issue-based costs order only be made “in a suitably exceptional case”, and nor was this to be implied, although there needs to be a reason based on justice for departing from the general rule:

 

“… the extent to which costs of a particular issue are to be disallowed should be left to the evaluation and discretion of the judge by reference to the justice and circumstances of the particular case.”

 

The reasonableness of taking failed points, and the extra associated costs, should be considered.

The judge should express an issue-based order by reference to the costs of an issue when appropriate.

However, generally, because of practical difficulties, they should hesitate in doing this, and, where practicable, express the order as a percentage of total costs or with reference to a distinct period of time.

There is no automatic rule requiring an issue-based costs order in the form of a reduction of a successful party’s costs if he loses on one or more issues.

The mere fact that a successful party was not successful on every last issue cannot, of itself, justify an issue-based costs order.

The courts recognise that, in any litigation, any winning party is likely to fail on one or more issue and possibly issues on which the losing party could have taken steps to protect himself, at least to an extent, as to a costs liability.

 

The court then cited with approval the second principle set out in

 

Factortame v Secretary of State [2002] EWCA Civ 22:

 

Each case will turn on its own circumstances, but the court should be trying to assess” who in reality is the unsuccessful party and who has been responsible for the fact that costs have been incurred which should not have been””.

 

This was a clinical negligence case which the claimant won, but the claimant had made allegations of lack of informed consent to the operation, but dropped that allegation part way through the trial.

The defendant paying party argued that that issue had caused unnecessary costs and that the claimant should only recover part of its costs, and also be responsible for 30% of the defendant’s costs.

The court held that a claimant’s offer was not a valid Part 36 offer as it was made less than 21 days before trial.

Here, the court’s order reflected the fact that the claimant did not succeed on a discrete part of her case, which had taken up a substantial amount of time at trial and was ultimately withdrawn.

The court ordered the defendant to pay 85% of the claimant’s costs of the proceedings.

This was not based on any precise mathematical analysis, but rather the court’s judgment on doing justice in all of the circumstances.

The failure by the defendant to make an offer of settlement, or accept an offer by the claimant which would have left it in a better position than following trial, were relevant factors in determining the percentage reduction in the claimant’s costs when the claimant had unreasonably pursued an issue to trial.

The court reminded litigants that the best way for a defendant to protect itself in relation to costs is by making a Part 36 offer.

 

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Written by kerryunderwood

October 12, 2018 at 7:40 am

Posted in Uncategorized

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