In ABA (by his Father & Litigation Friend, ABB) v University Hospitals Coventry & Warwickshire NHS Trust, the claimant pursued damages for personal injury based upon alleged clinical negligence. Breach of duty and causation were ordered to be tried as preliminary issues, but a compromise subsequently led to Mr Justice Saini entering judgment against the defendant on 11 January 2021 for 65% of damages to be assessed. By consent, he further ordered that “…the defendant do pay the claimant’s costs of and incidental to the issue of liability on the standard basis such costs to be the subject of a detailed assessment, if not agreed…”.
Notwithstanding the absence of any “forthwith” or “immediately” provision for assessment in the order, the receiving party commenced detailed assessment proceedings in respect of liability costs of £827,406.85 citing the order of 11 January 2021 as the authority for assessment. Keoghs, on behalf of the defendant, made an application for the notice of commencement to be set aside on grounds that, in the absence of an order for immediate detailed assessment, costs proceedings were premature.
The claimant contended that the order was a final order determining the matters in issue in the claim; that although an assessment of damages was still needed, the claimant was suing for the right to enter judgment against the defendant for damages rather than seeking an award of damages; the claimant’s legal rights in tort had merged with the judgment, thus the proceedings had concluded because the issues arising out of the original cause of action had been superseded by the judgment.
In a carefully written judgment, specialist costs judge Master Leonard analysed the pre and post CPR authorities and ordered the claimant’s Notice of Commencement be set aside. Of particular note was the learned master’s findings that:
All too often, receiving parties are overly keen to push claims into litigation or onto the next procedural stage without having allowed sufficient time for discussion and alternative dispute resolution. In costs cases, this behaviour often manifests with formal service of Notice of Commencement and a bill together with unreasonable demands for high interim payments and the threat of no extension being granted to the deadline for Points of Dispute.
Such conduct can lead to paying parties having to serve Points of Dispute; not because they are a significant aid to resolving quantum of costs, but because a receiving party will not compromise on their unreasonable demand for an unsustainable interim payment. On other occasions, paying parties find themselves in the situation, which occurred in this index case, namely a party has commenced costs proceedings when they are not entitled to.
Following this welcomed clarification from the Costs Office surrounding the scope and meaning of CPR 47.1, the timing of costs assessments may become a more prevalent issue in substantive proceedings as claimants push for “immediately” or “forthwith” provisions in orders for costs governing only part of the proceedings or preliminary issues. There are, however, a number of reasons why immediate assessment of only some of the costs partway through proceedings may not be viable or proportionate. Issues such as duplication of effort, avoiding the cost of two separate assessments and preserving allocation of precious court resource may justify deferring assessment of all costs until conclusion of proceedings.
Jurisprudence over recent years demonstrates a willingness to order substantial interim costs payments partway through a claim, thus mitigating the need for an immediate assessment, and although each case will turn on its own facts, there is a strong argument that costs are better dealt with conclusively at the end when all issues of conduct, proportionality and the other factors at CPR 44.4 can be put into proper context.
Keoghs will continue to work closely with their clients to ensure frictional cost and opportunistic behaviour is challenged and removed from the claims process.
Head of Costs
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