AB & Others v Ministry of Defence
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE FOSKETT,Mr Justice Foskett |
| Judgment Date | 19 June 2009 |
| Neutral Citation | [2009] EWHC 1421 (QB) |
| Court | Queen's Bench Division |
| Date | 19 June 2009 |
| Docket Number | Case No: TLQ/08/0023 |
[2009] EWHC 1421 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Mr Justice Foskett
Case No: TLQ/08/0023
Ben Browne QC and Simon Edwards, Catherine Foster and Mark James (instructed by Rosenblatt Solicitors) for the Claimants
Charles Gibson QC and David Evans, Adam Heppinstall and Richard Mumford (instructed by Treasury Solicitors) for the Defendant
Hearing date: 16 June 2009
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Ruling and that copies of this version as handed down may be treated as authentic.
RULING
Mr Justice Foskett:
Introduction
I handed down the substantive judgment on the preliminary issues in this case on Friday, 5 June, and put the matter over for any consequential submissions and applications to accommodate the convenience of Counsel. The various applications to which I will refer shortly were made on Tuesday, 16 June.
This Ruling represents the decisions on those submissions and applications.
The applications
There are effectively 3 matters to be considered, although there are sub-issues within them. The 3 matters can be summarised thus:
(i) the Defendant's application for enhanced protection over the protection afforded by CPR Part 38 in the event that some or all of the claims are discontinued in due course;
(ii) the Claimants' application for costs of the preliminary proceedings and for an interim payment on account of those costs;
(iii) the Defendant's application for permission to appeal.
There is some considerable overlap between (i) and (ii) and I will deal with them together.
Costs/Enhanced protection from the consequences of discontinuance
The Claimants seek their costs of the limitation issue and an interim payment on account of costs. The Defendant submits that the costs should be reserved or be made costs in the case. If I were to accede to the Defendant's submission, the question of enhanced protection, as I have described it, would not arise because no sums of money would be paid over to the Claimants' legal team until the conclusion of the substantive trial. The application for enhanced protection arises if I am persuaded to make an order for the payment of costs now and it derives from my observations between paragraphs 238–241 of the judgment. I will not repeat those observations in full for present purposes. I recognised, on the argument I had heard at the limitation trial, that there might be some prejudice to the Defendant if a Lead case surmounted the limitation threshold and was then discontinued because, for example, the view was taken that the case could not proceed because causation could not be established. I invited the Defendant, if it wished to submit that this was so and that CPR Part 38 did not afford adequate protection, to put forward submissions (a) to establish the proposition and (b) on how the Court might retain some control over the situation between now and when any trial takes place to ensure that the Defendant is not so prejudiced.
I should say immediately that, so far as I can recall, my attention was not drawn at the hearing to paragraph 39 of the Group Litigation Order ('the GLO') of 5 July 2007. At all events, it was certainly not in my mind when I drafted paragraphs 238–241 of the judgment. It is in these terms:
“After lead/reserve cases have been selected:
a. Such cases shall only be discontinued; and/or
b. The Defendants shall only be entitled to make a payment into Court or a Part 36 offer
with the permission of the Court.”
This plainly provides a somewhat wider power than the mere costs provisions of Part 38 and, from the purely procedural point of view, affords the mechanism that at least enables the Court to have some control over the entry into and exit from the proceedings of the Lead cases. Mr Charles Gibson QC did not, as I understood him, disagree that that provision offers the appropriate mechanism for the Court's involvement should discontinuance of a Lead case be contemplated. However, he submits that it is necessary for me to go further even at this stage in order to ensure that, as he describes it, “injustice” is not done to the Defendant if any of the Lead cases are discontinued.
The basis for the injustice for which he contends can be summarised in the following propositions:
i) The effect of the GLO (at paragraph 17) is to provide that all costs incurred on GLO issues (defined as “claims in respect of the common or related issues of fact or law arising out of the Master Particulars of Claim set out in paragraphs 1–15 and 99–102 of the Master Particulars of Claim together with the issue of limitation”) and in respect of “individual costs incurred in a claim whilst it is proceeding as a lead case” are “common costs”.
ii) Where any individual claimant (which would include a Lead case claimant) discontinues, he is liable for “common costs up to and including the quarter in which [the] notice of discontinuance is given”.
iii) In the situation where a claimant discontinues, the assessment of the amount he or she is to pay as “the proportionate share of the Defendant's common costs attributable to that claimant” is to be reserved until “all the common issues have been determined” subject to the parties having liberty to apply.
iv) Because (as Mr Gibson contends) each Lead claimant is liable for one-tenth (1/10th) of the common costs, there will be no fully effective way in which those costs could be recouped by the Defendant if a costs order is made in favour of the Claimants on the limitation issue now and then, in due course, one or more of the Lead cases is discontinued.
What Mr Gibson contends for in what he suggests are the “exceptional circumstances” of this case is primarily that, notwithstanding the Claimants' victory on the limitation issue, I should order that the costs of the limitation issue should be reserved to the trial of the substantive issues or that they should be made costs in the case. If, as he recognises, that might lead to the Claimants' legal team being in effect starved of funds at a time when they might reasonably have been expected to be put in funds, he suggests that the Defendant's solicitors undertake to pay the Claimants' solicitors a proportion of their limitation costs on account in return for a cross-undertaking by the them for the repayment of the appropriate proportion of limitation costs (said to be one-tenth) in the event of discontinuance or dismissal of any one of the Lead cases. Another way of dealing with what he argues would be the “injustice … likely to be caused by a conventional costs order” is that I should direct that each of the Lead cases remains a Lead case through to the substantive trial.
I should say that Mr Gibson's submission that one-tenth of the common costs should be attributed to each of the Lead cases is based upon what he says is the approach adopted by the Court of Appeal in Nash v Eli Lilly [1993] 1 WLR 782, the case arising from the Opren litigation.
Mr Benjamin Browne QC submits that these concerns are misplaced and the approach is misconceived. In the first place, he says that from as long ago as 22 December 2005 the Ministry of Defence indicated that it was taking the limitation point, the preliminary proceedings have been contested on that basis, the Ministry of Defence has now lost on that issue and, accordingly, the costs of that issue should follow that event. He challenges also what he contends are two false assumptions in the Defendant's position: first, that even if a Lead claimant discontinues his claim at a later stage, the Defendant should necessarily be able to recover the whole of the limitation costs attributable to that Lead claimant's participation in the proceedings thus far; second, and in any event, that each Lead claimant should be notionally regarded as liable for one-tenth of the total costs.
There is no doubt that group actions such as the present action raise complex funding and costs issues. Whilst efforts will always (and rightly) be made to standardise the approach to the way in which the appropriate structures are put in place, it is difficult to see how a “one cap fits all” approach can apply in all cases. This particular group action (which, by everyone's assessment, is unique in very many respects) is such that, in my view, it is unduly simplistic to say that the total costs of the limitation issue should be allocated as to one-tenth for each Lead claimant. The parties happened to choose 10 lead cases – they might have chosen 5 or 50. I do not see, therefore, why the fortuitous choice of the number of Lead cases should necessarily impact on how the limitation costs should be apportioned vis-à-vis the Defendant. The reality is that a number of Lead cases (it happens to have been 10) were chosen to assist in determining the limitation issues applicable to all 1011 claimants. I do not consider that I have the material upon which I could decide, if called upon to do so, how or to what extent vis-à-vis the Defendant (i.e. in contradistinction to what may be the position as between the individual claimants) the total cost of the limitation issue should be apportioned as to an individual claimant. Having tried the various limitation issues put before me, it was obvious to me (as will appear from the judgment) that a great many of the generic issues were relevant both to the issue of “knowledge” in an individual case and to the exercise of the section 33 discretion where it fell to be exercised. Whilst the Defendant challenges that view, it happens to be my view and, accordingly, will inevitably feed into my view on the question of costs. In many respects, in my view, the claims...
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