James Nosworthy (as Representative of the Estate of Barbara Nosworthy (Deceased) v Royal Bournemouth & Christchurch Hospitals NHS Foundation Trust
| Jurisdiction | England & Wales |
| Judge | Master Brown |
| Judgment Date | 30 April 2020 |
| Neutral Citation | [2020] EWHC B19 (Costs) |
| Date | 30 April 2020 |
| Docket Number | Case No: BRO 1805481 |
| Court | Senior Courts |
[2020] EWHC B19 (Costs)
IN THE HIGH COURT OF JUSTICE
SENIOR COURTS COSTS OFFICE
Master Brown
Case No: BRO 1805481
Mr. George McDonald, Counsel (instructed by Hugh James) for the Claimant
Mr. Ken Corness, Costs Lawyer (of Acumension) for the Defendant
Hearing date: 3 April 2020
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
This judgment was handed down by the judge remotely by circulation to the parties' representatives by email and release to Bailii. The date and time for hand-down is deemed to be 4.15 pm on Thursday 30 April 2020
The issue arising for me to determine is whether the Claimant should be awarded interest on an element of his costs, in particular a disbursement said to have been funded by the taking out of a loan at an interest rate of 15%. The sum claimed is £235.
I was first asked to determine this claim on a provisional basis pursuant to the provisions of CPR 47.15. Following my rejection of the claim, there was an oral hearing at the request of the Claimant (which took place by videolink) after which I emailed the parties details of a number of authorities which had not been cited in argument for their further comment. I have considered the points made by them in their additional written submissions.
As appears from the narrative to the Bill of Costs the Claimant sought damages following the admission of his mother to hospital aged 75; it was alleged that the Defendant were negligent in the management of pressure sores in the period between 13 January and 29 January in 2015. A claim was made for her pain and suffering in the period between January 2015 and her death in July 2016. It was funded by a conditional fee agreement (CFA) supported by an ‘After the Event’ (ATE) insurance policy. The claim settled on or about 28 March 2018 in the sum of £37,500 together with reasonable costs.
I am told that informal negotiations were commenced in respect of the costs claimed on 10 May 2018 but as the parties were unable to reach agreement Part 8 proceedings were commenced in respect of the costs only. Following the issue of proceedings I made an order in the usual way on 16 October 2018 that pursuant to the agreement between the parties the Defendant pay the Claimant's costs of his claimant subject to detailed assessment, if not agreed, on the standard basis.
The Notice of Commencement of Detailed Assessment Proceedings dated 25 October 2018 is in standard form and included the following:
“Interest may be added to all High Court judgement and certain County Court judgements of £5000 more under the Judgements Act 1838 and the County Courts Act 1984”
Following receipt of the Part 8 order a Bill of Costs claiming costs of £25,327.88 was served formally on the Defendant together with a schedule, included amongst the documents accompanying the Bill of Costs. which detailed separately a claim for “pre-judgement interest” and “post judgement interest”.
On 8 August 2019 the parties agreed the costs claimed within the Bill of Costs in the sum of £20,000. The Claimant now seeks interest for the period prior to the Part 8 order. The particular disbursement which is said to justify the claim is the expense of an expert medical report which is said to have been paid for on 3 May 2017. The report cost £1,280 plus VAT. The loan was, I am told, discharged on 11 May 2018 after payment of damages. Although the head of interest in respect of “pre-judgment interest” is disputed interest has, as I understand it, been agreed and paid at the judgment rate of 8% from the date of order of 16 October 2018 (after allowing for a payment on account of costs).
In support of his claim the Claimant relies upon provisions of CPR 44.2 (6) (g). CPR 44.2 provides that:
(1) The court has discretion as to —
(a) whether costs are payable by one party to another;
(b) the amount of those costs; and
(c) when they are to be paid.
(2) If the court decides to make an order about costs –
(a) the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party; but
(b) the court may make a different order.
(3) The general rule does not apply to the following proceedings – …
(4) In deciding what order (if any) to make about costs, the court will have regard to all the circumstances, including –
(a) the conduct of all the parties;
(b) whether a party has succeeded on part of its case, even if that party has not been wholly successful; and
(c) any admissible offer to settle made by a party which is drawn to the court's attention, and which is not an offer to which costs consequences under Part 36 apply.
(5) The conduct of the parties includes –
(a) conduct before, as well as during, the proceedings and in particular the extent to which the parties followed the Practice Direction – Pre-Action Conduct or any relevant pre-action protocol;
(b) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;
(c) the manner in which a party has pursued or defended its case or a particular allegation or issue; and
(d) whether a claimant who has succeeded in the claim, in whole or in part, exaggerated its claim.
(6) The orders which the court may make under this rule include an order that a party must pay –
..
(g) interest on costs from or until a certain date, including a date before judgment.
….
Mr. McDonald, for the Claimant, asserts that the Claimant could not fund the disbursement himself and that for this reason he entered into a lending agreement with a lender, he referred to as Lime Finance. He says that the Claimant could not have pursued the claim without obtaining finance as he would not have been able to prove liability or quantum without the report. Further, he says that interest on the loan has been paid out of damages recovered. As to the rate of interest at 15% per annum, this is said to be an unremarkable or unexceptional rate of interest on unsecured borrowing by private individuals of limited means. He says that the award pre-judgement interest is proportionate when considered alongside the factors in CPR 44.3.
Mr. McDonald relies upon the decision in Jeffrey Jones and others v Secretary of State for Energy and Climate Change and others [2014] EWCA Civ 363. The issue arising before the Court of Appeal, as it had been before from Swift J at first instance [2013] EWHC 1023 (QB), was as to the rate of interest payable in respect of disbursements. The expenses had been incurred by claimants, who were described as being of limited means, in the Phurnacite Workers Group Litigation. The disbursements consisted mainly of payments for experts' and counsels' fees, amounting in total to more than £787,500. The particular issue arising in the case, as appears from paragraph 15 of the judgment, is whether the judge had been wrong to look at the position of claimants for the purpose of determining the appropriate rate, it being argued that the claim should, in effect, have been treated as a subrogation claim by the solicitors. The Court of Appeal rejected this contention.
Sharp LJ held as follows:
The power to order interest on costs, including pre-judgment interest on costs is derived from CPR 44.2(6)(g). The equivalent rule was CPR 44.3(6)(g) before the Jackson reforms. The rule provides that the court may order “interest on costs from or until a certain date, including a date before judgment”.
She went on to say this:
“The purpose of such an award is to compensate a party who has been deprived of the use of his money, or who has had to borrow money to pay for his legal costs. The relevant principles do not materially differ from those applicable to the award of interest on damages under section 35 A of the Senior Courts Act 1981. The discretion conferred by the rule in respect of pre-judgment interest is not fettered by the statutory rate of interest, under the Judgments Act 183, but is at large. Ultimately, the court conducts a general appraisal of the position having regard to what is reasonable for both the paying and the receiving parties. This normally involves an assessment of what is reasonable having regard to the class of litigant to which the relevant party belongs, rather than a minute assessment which it would be inconvenient and disproportionate to undertake.
Reliance is also placed by Mr. McDonald upon the decision in Powell v Herefordshire Health Authority [2002] EWCA Civ 1786 as support for the contention that the Costs Judge when assessing the costs also has a power to award interests on this costs for period prior under CPR 44.2 (6) (g). In that case the Master Rogers had considered himself bound by sections 17 and 18 of the Judgments Act 1838 to award judgment rate interest from the date of the costs order despite a very substantial delay in pursuing a claim for costs following the costs order in that case. It appears the parties had not brought CPR 44.3 (6) (g) (the predecessor of CPR 44.2 (6) (g)) to the attention of the Costs Judge. Before the Court of Appeal it was common ground that the Costs Judge was not bound as had thought and that this provision permitted him to order a later date than the relevant costs from which judgment rate interest would apply. The date for commencement of interest rate could be adjusted accordingly
I note in this context that CPR 40.8 also provides:
(1) Where interest is payable on a judgment pursuant to section 17 of the Judgments Act 1838 1 or section 74 of the County Courts Act...
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