Martin George Scales v Motor Insurers' Bureau
| Jurisdiction | England & Wales |
| Judge | Mr Justice Cavanagh |
| Judgment Date | 02 July 2020 |
| Neutral Citation | [2020] EWHC 1749 (QB) |
| Court | Queen's Bench Division |
| Docket Number | Case No: C90BM293 |
| Date | 02 July 2020 |
[2020] EWHC 1749 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
BIRMINGHAM DISTRICT REGISTRY
Mr Justice Cavanagh
Case No: C90BM293
Matthew Chapman QC (instructed by Irwin Mitchell) for the Claimant
Lucy Wyles (instructed by Weightmans) for the Defendant
Hearing dates: 18–21 May 2020
SUPPLEMENTARY JUDGMENT ON COSTS
I have, today, handed down my judgment on quantum in these proceedings. I have awarded compensation and penalty interest to Mr Scales in the sum of £539,096.83.
In the normal way, I provided the parties with a copy of my judgment in draft and invited them to see if they could agree upon the form of the order and any consequentials. The parties agreed a number of matters, but they were unable to reach agreement on three matters which will affect the order in relation to costs and, in one respect, the sum to which Mr Scales is entitled. Mr Chapman QC, for the Claimant, and Ms Wyles, for the Defendant, have helpfully provided me with written submissions on the outstanding issues, and the parties have agreed that I should determine them on the basis of the written representations. These matters are:
(1) Whether there should be an issue-based costs order;
(2) The Part 36 consequences to which Mr Scales is entitled; and
(3) The quantum of an interim payment as to costs.
The issue arise only in relation to the quantum hearing. A costs award has already been made by His Honour Judge Cooke in relation to the liability hearing.
It is common ground that English law and procedure applies to these issues. I will deal with them in turn.
Should there be an issue-based costs order?
The MIB accepts that, in the main, costs should follow the event in these proceedings. Mr Scales has recovered substantial compensation. The MIB did not make a Part 36 Offer in these proceedings. On 5 June 2020 (after the hearing of the quantum stage but before the 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.
was received), the MIB made a “without prejudice save as to costs” offer in full and final settlement in the sum of €440,068.11 (£393,076) gross of CRU and interim payments. Mr Scales “beat” this offer by something over £150,000 and so the MIB does not suggest that I should take account of this offer when determining costs.
However, Ms Wyles, on behalf of the MIB, submits that this is a case in which an issue-based costs order should be made, pursuant to CPR 44.2 for costs before 1 April 2020 and pursuant to CPR 36.17(4) for costs thereafter. The significance of the date of 1 April 2020 is that this was 21 days after Mr Scales made a Part 36 offer (on 11 March 2020). In his Part 36 offer, Mr Scales offered to settle his claim for the sum of £500,000, inclusive of interest. He has “beaten” this offer also. The MIB had until 1 April 2020 to accept the offer. Needless to say, the MIB did not do so.
CPR 44.2, of course, sets out the Court's general discretion as to costs. CPR 44.2(2) provides that the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party, but that the Court may make a different order. CPR 44.2(4)(b) provides that in deciding what order to make about costs, the Court will have regard to all of the circumstances including whether a party has succeeded in part of its case, even if the party has not been wholly successful.
CPR 36.17(4) applies where, as here, the judgment against the Defendant is at least as advantageous to the Claimant as the proposals contained in a Claimant's Part 36 Offer. CPR 36.17 (4) provides that the Court must, unless it considers it unjust to do so, award costs on the indemnity basis, and interest on those costs, from the date when the offer expired. In addition, the Court must, subject to the proviso, award an additional amount, which shall not exceed £75,000, calculated by applying the “prescribed percentage” to the sum awarded to the Claimant by the Court. The “prescribed percentage”, in a case such as this where the Court has awarded more than £500,000, is 10% of the first £500,000 and (subject to the limit of £75,000) 5% of any amount above that figure.
It is clear from CPRs 44.2 and 36.17 that, different tests can apply to the award of costs for the period before and after 1 April 2020. For the period before 1 April 2020, the normal approach under CPR 44.2 applies. For the period after 1 April 2020, Mr Scales is entitled to all of his costs unless it would be unjust, in all the circumstances, to award him some or all of his costs: Webb v Liverpool Women's NHS Foundation Trust [2016] EWCA Civ 365; [2016] 1 WLR 3899, paragraph 38.
Ms Wyles points out that Mr Scales was unsuccessful in two parts of his claim. He was unsuccessful in his contention that he was entitled to care costs and to future costs. Ms Wyles submits that he lost on these issues because of the application of established principles of Spanish law. Moreover, had these issues not been pursued, the care expert evidence, which dealt not only with care costs but also with services and future case management, none of which, in the event, was recoverable, would not have been necessary. The care expert evidence alone occupied one day of the trial. In those circumstances, Ms Wyles submits that a conservative and fair approach to reducing the costs accordingly would be an order that the Claimant should not recover costs in the expert phase in respect of the care expert evidence and that the Claimant's costs in the trial preparation and trial phases should be reduced by 25%.
The correct approach to issue-based costs awards under CPR 44.2 has recently, and very helpfully, been set out by Stephen Jourdan QC, sitting as a Judge of the Chancery Division, in Pigot v Environment Agency [2020] EWHC 1444 (Ch), at paragraph 6 of his judgment:
“(1) The mere fact that the successful party was not successful on every issue does not, of itself, justify an issue-based cost order. In any litigation, there are likely to be issues which involve reviewing the same, or overlapping, sets of facts, and where it is therefore difficult to disentangle the costs of one issue from another. The mere fact that the successful party has lost on one or more issues does not by itself normally make it appropriate to deprive them of their costs.
(2) Such an order may be appropriate if there is a discrete or distinct issue, the raising of which caused additional costs to be incurred. Such an order may also be appropriate if the overall costs were materially increased by the unreasonable raising of one or more issues on which the successful party failed.
(3) Where there is a discrete issue which caused additional costs to be incurred, if the issue was raised reasonably, the successful party is likely to be deprived of its costs of the issue. If the issue was raised unreasonably, the successful party is likely also to be ordered to pay the costs of the issue incurred by the unsuccessful party. An issue may be treated as having been raised unreasonably if it is hopeless and ought never to have been pursued.
(4) Where an issue based costs order is appropriate, the court should attempt to reflect it by ordering payment of a proportion of the receiving party's costs if that is practicable.
(5) An issue based costs order should reflect the extent to which the costs were increased by the raising of the issue; costs which would have been incurred even if the issue had not been raised should be paid by the unsuccessful party.
(6) Before making an issue-based costs order, it is important to stand back and ask whether, applying the principles set out in CPR r.44.2, it is in all the...
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