A CASE FOR INTERIM DECLARATIONS AS TO FINAL COSTS

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Trustees

We all know that the general rule is that costs follow the event, that is that the loser pays the winner, and although that is hedged round with qualifications, it is generally a fairly straightforward thing for lawyers to advise clients of that principle.

However, there are many situations where a litigant will not find out until the end of the case whether they in fact enjoy the protection that they thought they had.

Examples include:

(i) Trustees;

(ii) Cases where Qualified One-Way Costs Shifting may or may not apply;

(iii) Part 36.

I have recently written up the case of

Price & Anor v Sanders [2019] EWCA Civ 2261

under the title

TRUSTEES, COSTS FOR AND AGAINST, AND INDEMNITIES

As the name suggests, the case deals with the indemnity enjoyed by trustees in conducting litigation, and the circumstances in which it may be lost.

It would be helpful and fairer to all parties if a declaration could be made early on as to whether a trustee did enjoy indemnity in the case, or whether it was essentially hostile litigation which deprives the trustee of that protection.

Qualified One-Way Costs Shifting

The same applies in Qualified One-Way Costs Shifting cases, where the starting point is that a claimant in personal injury matters has a costs order made against her or him on defeat, but that cannot generally be enforced.

There are many exceptions, and few of us would have difficulty with the fact that where the claimant has behaved dishonestly or there has been an abuse of process, then the claimant should be deprived of those costs.

However, there are many more difficult issues, where there has been no blameworthy conduct by the claimant.

For example, protection may be lost if the claim is a mixed one, that is partly for personal injuries and partly for something else.

It may also be lost if the claim is for the benefit of another.

Again, it would be helpful if an interim declaration could be made by a judge stating, for example, that it is a mixed claim and the claimant will enjoy protection as to 40% of the costs, or whatever.

Part 36

By definition the parties will not know where the incidence of costs lies until it is known whether or not an offer has been beaten, and there is no easy way round that.

However, where there is an issue as to the validity of a Part 36 Offer, then again there could be an early declaration by a judge on this point.

These would generally be fairly short points and could be dealt with by a corps of specialist judges.