Kerry Underwood

COURT MAY ORDER INTERIM PAYMENT ON ACCOUNT OF QUANTUM COSTS BEFORE QUANTUM HAS BEEN RESOLVED

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The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

In

X v Hull & East Yorkshire Hospitals NHS Trust [2019] 2 WLUK 723 (25 February 2019)

Sheffield County Court allowed the claimant’s appeal in clinical negligence proceedings, holding that the court has jurisdiction to order quantum costs, and an interim payment on account of such costs, before resolution of quantum.

The judgment highlights the risks of arguing complex, fact-sensitive applications over the telephones.

Liability was settled at 90% in December 2012, but the parties agreed that quantum could not be assessed until 2022.

The judge noted that costs generally followed the event, which was a formidable obstacle to a pre-emptive costs order – see

McDonald v Horn [1995] 1 All ER 961.

However, the judge considered CPR 44.2(1)-(2) wide enough to permit the order the claimant sought.

CPR 44.2(1) gave the court discretion as to whether costs were payable and, if so, the amount and timescale, and CPR 44.2(2) sets out the general rule that the unsuccessful party pays the successful party’s costs.

CPR 44.6(c), allows the court to order payment of costs from, or until, a certain date.

The claimant had already achieved partial success on quantum under CPR 44.2(4)(b) by securing £1.2 million in payments on account of damages, and the claimant’s final award was very likely to far exceed that figure.

As the defendant had not made any Part 36 offer, it was “a virtual certainty” that the claimant would be entitled to costs to date.

The lower court had determined an “exquisitely fact sensitive” issue summarily and at a busy telephone hearing, without the benefit of the far more detailed submissions made on appeal.

The claimant already had an order for liability costs down to December 2012, detailed assessment of which was yet to be commenced, but the lower court overlooked the fact that the claimant’s current solicitors would not benefit from that order; all their costs were incurred subsequently.

The defendant’s failure to make sensible voluntary interim payments without the claimant having to “go to the wire” sounded in conduct within CPR 44.2(5).

Further, a failure to ensure adequate cash flow during the delay between determination of liability and quantum could dissuade solicitors from taking on cases like this at an early stage.

Therefore, the County Court Judge ordered the defendant to pay the claimant’s costs up to the first instance hearing, and to make a £150,000 payment on account.

Any costs overpayment, very unlikely here, could be deducted from damages, and that is the primary remedy of a defendant who has overpaid costs to the claimant’s solicitors.

Written by kerryunderwood

May 29, 2019 at 9:14 am

Posted in Uncategorized

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