PME v The Scout Association
| Jurisdiction | England & Wales |
| Judge | Leonard |
| Judgment Date | 20 January 2023 |
| Neutral Citation | [2023] EWHC 158 (SCCO) |
| Docket Number | Case No: SC-2017-DAT-006054 |
| Court | Senior Courts |
[2023] EWHC 158 (SCCO)
COSTS JUDGE Leonard
Case No: SC-2017-DAT-006054
CL1706106
IN THE HIGH COURT OF JUSTICE
SENIOR COURTS COSTS OFFICE
Thomas More Building
Royal Courts of Justice
London WC2A 2LL
Roger Mallalieu KC (instructed by Bolt Burdon Kemp) for the Respondent
Jamie Carpenter KC (instructed by Clyde & Co) for the Defendant/Applicant
Hearing date: 18 October 2022
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.
COSTS JUDGE Leonard
This judgment addresses an application by the Defendant for an order to the effect that Bolt Burdon Kemp LLP (“BBK”) pay costs which the Claimant has been ordered to pay to the Defendant. I must thank counsel for both parties for their cogent and detailed submissions, by which I have been greatly assisted.
Statutory Provisions and the Civil Procedure Rules (“CPR”)
Section 51 of the Senior Courts Act 1981, at subsections (2) and (3) empowers this court to make costs orders against parties other than those who have brought or defended litigation:
“(1) Subject to the provisions of this or any other enactment and to rules of court, the costs of and incidental to all proceedings in… the High Court… shall be in the discretion of the court.
(2) Without prejudice to any general power to make rules of court, such rules may make provision for regulating matters relating to the costs of those proceedings…
(3) The court shall have full power to determine by whom and to what extent the costs are to be paid.”
Part II of CPR 44 sets out The Qualified One-Way Costs Shifting (“QOCS”) provisions introduced in 2013 for personal injury cases. CPR 44.14 (1) provides:
“Subject to rules 44.15 and 44.16, orders for costs made against a claimant may be enforced without the permission of the court but only to the extent that the aggregate amount in money terms of such orders does not exceed the aggregate amount in money terms of any orders for damages and interest made in favour of the claimant.”
Under the heading “Exceptions to qualified one-way costs shifting where permission required”, CPR 44.16(2)(a) and (3) provide:
“(2) Orders for costs made against the claimant may be enforced up to the full extent of such orders with the permission of the court, and to the extent that it considers just, where –
(a) the proceedings include a claim which is made for the financial benefit of a person other than the claimant…
(3) Where paragraph (2)(a) applies, the court may, subject to rule 46.2, make an order for costs against a person, other than the claimant, for whose financial benefit the whole or part of the claim was made.”
Practice Direction 44, at paragraphs 12.2 and 12.5 provides:
12.2
Examples of claims made for the financial benefit of a person other than the claimant… within the meaning of rule 44.16(2) are subrogated claims and claims for credit hire.
12.5
The court has power to make an order for costs against a person other than the claimant under section 51(3) of the Senior Courts Act 1981 and rule 46.2. In a case to which rule 44.16(2)(a) applies (claims for the benefit of others) –
(a) the court will usually order any person other than the claimant for whose financial benefit such a claim was made to pay all the costs of the proceedings or the costs attributable to the issues to which rule 44.16(2)(a) applies, or may exceptionally make such an order permitting the enforcement of such an order for costs against the claimant.
(b) the court may, as it thinks fair and just, determine the costs attributable to claims for the financial benefit of persons other than the claimant.”
I should refer also to the following definitions at CPR 2.3 and the Glossary referred to at CPR 2.2:
( CPR 2.3) “‘claimant’ means a person who makes a claim;
( Glossary) Counterclaim… A claim brought by a defendant in response to the claimant's claim, which is included in the same proceedings as the claimant's claim…”
For ease of reference, I shall adopt the terminology used by Mr Mallalieu for BBK, and refer to the order sought by the Defendant as a Non-Party Costs Order (“NPCO”).
The Procedural History
The Claimant claimed against the Defendant damages for personal injury. On 22 August 2017, without proceedings being issued, the Claimant accepted the Defendant's Part 36 offer of £29,500.
The Claimant served a schedule of costs in August 2017. In September 2017 the Defendant, on the basis of that schedule, offered to settle the claim for costs at £22,500. That offer was rejected.
On 20 November 2017, on the Claimant's Part 8 application, the Senior Costs Judge made a “costs-only” order under CPR 47.14 providing, at paragraph 2:
“The Claimant's costs of the claim arising from the cause of action described in the claim form in respect of which terms of settlement have been agreed shall be paid by the Defendant and be the subject of a detailed assessment hearing in this Court.”
The Claimant served a bill of costs on 23 November 2017. The bill came to £42,118.58. The Claimant's bill was provisionally assessed by Costs Officer Kenny at £22,868. Excluding the time for drafting the bill, the figure was £21,357.80, less than the Defendant's September 2017 offer. The Claimant sought, under CPR 47.15 (7)-(9), an oral review on the issue of hourly rates and document time only.
At the oral review on 15 August 2018 before Costs Officer Kenny the Claimant conceded the document time point and only the hourly rates were reviewed. They were slightly increased, the bill being assessed at £23,626.28. Deducting again the costs of drafting the bill, the Claimant's costs were assessed at £22,096.28. This was still less than the Defendant's offer of September 2017.
As a result, the Claimant was ordered to pay the Defendant's costs of the Part 8 proceedings, the provisional assessment and the oral review, which were assessed at £3,290.11. Interest on the Claimant's assessed costs was disallowed.
That is the first costs order to which this application relates: the order made by Costs Officer Kenny on 15 August 2018.
The Claimant then filed an Appellant's notice under CPR 47.21.
The Grounds of Appeal stated:
“… the Claimant seeks a de novo detailed assessment hearing so that all issues and costs not agreed are heard afresh and assessed in the usual manner. Therefore all decisions made by Costs Officer Kenny at the provisional assessment and subsequent oral hearing are appealed…”
The Grounds of Appeal went on to identify preliminary issues including the argument that the appeal hearing would, effectively, be a new detailed assessment on the standard basis and an argument (not subsequently pursued) to the effect that a costs officer does not have jurisdiction to summarily assess costs.
The appeal was listed before me on 14 February 2019. On the day, the Claimant raised a new argument to the effect that a costs officer did not have jurisdiction to conduct a provisional assessment at all. The hearing was adjourned, so that two issues could be argued before me: whether the appeal was limited to the issues actually considered by Ms Kenny on 15 August 2018, and whether Ms Kenny had had jurisdiction to undertake the provisional assessment.
I heard argument on those issues on 3 May 2019 and handed down judgment on 30 July 2019. I found that there was no viable argument to the effect that costs officers have no jurisdiction to conduct provisional assessments; that there is no appeal from a provisional assessment, only from an oral hearing, if requested; and that any such appeal would be limited to decisions made at the oral hearing.
I reserved to the detailed assessment hearing the costs of the issues addressed by my judgment. The Claimant sought (and I granted) permission to appeal only on the issue of whether, following an oral hearing under CPR 47.15 (7)-(9), a party's rights of appeal extend not only to decisions made at the oral hearing but to decisions made on the provisional assessment that preceded it.
The Claimant's appeal from my judgment of 30 July 2019 was dismissed by Stewart J on 12 December 2019. The Claimant was ordered to pay the Defendant's costs of the appeal, summarily assessed at £8,091 net of VAT.
That is the second costs order to which this application relates.
On 16 January 2020 I heard and dismissed the substantive appeal from Costs Officer Kenny, ordering the Claimant to pay the Defendant's costs of the appeal. I gave directions for the determination of those costs in a hearing listed for 3 July 2020, which was adjourned by consent to await the judgment of the Supreme Court in Ho v Adelekun [2021] UKSC 43.
It is not, as I understand it, in dispute that because the Claimant has accepted a Part 36 offer from the Defendant, there is no order for damages in favour of the Claimant against which the Defendant could enforce an order for costs without the permission of the court (see Cartwright v Venduct Engineering Limited [2018] 1 WLR 6137, at paragraph 44). The effect of the decision in Ho (handed down on 6 October 2021) is that the Defendant is also unable to recover its costs by way of set-off against the damages or costs payable to the Claimant.
It follows that, without the permission of the court, the Defendant has no means of recovering from the Claimant the costs which the Claimant was ordered to pay by Costs Officer Kenny on 15 August 2018 (£3,290.11); by Stewart J on 12 December 2019 (£8,091 net of VAT, the recoverability of which is a bone of contention between the parties); and by me on 16 January 2020 (which have yet to be assessed but...
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