R (Factortame Ltd )v Secretary of State for the Environment, Transport and the Regions (Costs)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Waller,Lord Justice Sedley,Lord Justice Simon Brown |
| Judgment Date | 28 January 2002 |
| Neutral Citation | [2002] EWCA Civ 22 |
| Docket Number | Case No: A1/2000/3152 |
| Court | Court of Appeal (Civil Division) |
| Date | 28 January 2002 |
[2002] EWCA Civ 22
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
His Honour Judge Toulmin CMG QC
Lord Justice Simon Brown
Vice President of the Court of Appeal
Civil Division
Lord Justice Waller and
Lord Justice Sedley
Case No: A1/2000/3152
Nicholas Strauss QC and Jonathan Middleburgh (instructed by Messrs Edwin Coe for the Appellants)
David P Friedman QC and Miss Rachel Ansell (instructed by the Treasury Solicitor for the Respondent)
Introduction
This is an appeal by certain claimants from part of the order of Judge Toulmin CMG QC dated 27 July 2000 in relation to costs. It is said to raise a point of principle in relation to the approach of the court to Part 36 offers. Mr Strauss QC for the appellants would suggest that the point of principle can be expressed in this way:
"Where (a) a defendant makes a Part 36 payment which the claimant does not accept, (b) the defendant then makes a significant amendment to his case on the basis of information which had always been available to him, and (c) the claimant then promptly accepts the Part 36 payment which he has previously refused, in general the answer should be that the claimant is the successful party."
He would suggest that the judge failed to have regard to that principle. Mr Friedman QC on the other hand would suggest that although it must be a relevant consideration that a party has amended his case just prior to the acceptance of a Part 36 offer, it is for the judge to assess the extent to which that amendment should dislodge the prima facie position that a person who has failed to beat the payment-in should pay the costs from the date on which the payment-in should have been accepted.
Background
The judge in his judgment set out the full history of what has been termed the "Factortame litigation". Following a decision in the course of that litigation that the Government (defendants/respondents) was liable to compensate the claimants, the assessment of the damages was put in the hands of the Technology and Construction Court. In that court certain claimants became fast-track claimants and others slow-track claimants. Some fast-track claimants were represented by Thomas Cooper & Stibbard and some by Edwin Coe and as a result became known generically as the TCS and EC claimants. All the fast-track claimants ultimately accepted, or were permitted by the defendants to accept, Part 36 offers made by reference to different issues, but they accepted them at different stages of the litigation. There was no agreement as to the costs implications if permission was given to accept the offers. That was left to the court. The judge in his judgment of 27 July 2000 was thus concerned to deal with orders for costs in relation to various issues in the context of various Part 36 offers accepted at various stages of the litigation with the consent of the defendants all outside the 21 day time limit given by Part 36. The only point live on this appeal relates to the judge's order for costs on one issue—the assessment of damages for what was called period 2. It concerns the EC claimants only. They were permitted by the defendants (subject to the court ruling on costs) to accept on 17 th April 2000 a Part 36 payment made on 17 th December 1999. The 17 th April 2000 was at the very end of the trial. It was also only a day or so after the judge had ruled certain evidence admissible which evidence might have reduced the damages recoverable by the EC claimants for period 2. It was (I should stress) accepted by the defendants that the figures that they were seeking to place in evidence had, through an error on their part, not been supplied to the claimants as early as they should have been. The figures were calculated from material within the control of the defendants. They thus could have been available even before the dates of the payment in. The defendants carried out the research on the material within their possession only at a stage after 17 th December 1999. They actually had the relevant figures by 28 thFebruary 2000 which they intended the claimants to have at that stage. By a mistake for which they were entirely responsible, the figures were not handed over until 5 th April 2000.
It will be seen immediately how the battle lines would be likely to be drawn. The EC claimants submitted that a material change in the case of the defendants brought about by a mistake on their part, should entitle them to reassess a Part 36 payment, and allow them to take the payment out with an order for costs right up to the date of the ultimate acceptance. The defendants' submission on the other hand was that it was not the material change in the defendants' case which had made all the difference; that simply provided an excuse to take the money out having regard to the way in which the case had gone at the trial, now nearly completed. Thus the submission was that the EC complainants should accept the normal consequences of failing to beat the payment in and pay costs since the date when the payment in should have been accepted.
The judge's ruling I will set out. But to understand it fully I must explain that so far as the TCS claimants were concerned, they had been permitted to accept Part 36 payments before any amendment in the defendants' case. Their argument had simply been that it would be unfair to take the view that in complex litigation such as this 21 days from the date of payment in was a sufficient period in which to consider the offers from the defendants. This argument was also supported as an alternative to their main argument by the EC claimants. On that point the judge had ruled that there was merit in the claimants' point and found that 7 th February was the date on which the payments in should have been accepted. On the point relating to the effect of the amendment he ruled as follows:
"The Edwin Coe applicants have a separate argument on costs. They say that the information on revised catch data mitigating income, which they only received on 5 th April 2000 (but which they should have received on 28 th February 2000) changed fundamentally the nature of the claim, in that it had the effect of reducing significantly the sums which the Edwin Coe applicants were entitled to receive for period 2 losses. They say that the Government should pay all their costs in relation to these issues. They say, as I have already set out, that the fact that this information was decisive in their decision to accept the Part 36 payments is to be inferred from the fact that they sought a ruling from me on the admissibility of the evidence on Day 22 of the trial, and that they accepted the payments a few days after I had ruled that the evidence was admissible.
The Government says that if one considers the report of the Edwin Coe fisheries expert, Mr Cox, in November 1999 and his evidence at trial, it is reasonable to infer that the delay in providing the data made no difference to the Edwin Coe applicant's conduct of the case and consideration of the part 2 offers, since catch data as mitigating income was only used by Mr Dyson as a reasonableness check and not for the purpose of substantive calculations. I have no means of resolving this conflict. The Edwin Coe applicants have, as is their right, chosen not to waive privilege. There is no reason to suggest that they should have done so. My ruling was given on Day 22 of the trial, after much evidence had been given.
I am unable, on the evidence before me, to say or to infer what influenced the Edwin Coe applicants to settle their remaining period 2 claims. The furthest I can go on the evidence is to take some account of the chance that the additional data may have had an effect in relation to the period 2 claims in influencing the decision of the Edwin Coe applicants. This can best be done by extending the period for which the Government must pay the costs in relation to these issues. In relation to these period 2 claims, the Edwin Coe applicants are to be entitled to their costs to 14 th February 2000. Thereafter they must pay the Government's costs in relation to these issues."
Complaint is made about the shortage of reasons in the above ruling. But certain points should be made about that criticism at the outset. First, the judge had set out the guiding principles applicable at an earlier stage in his judgment and the real question is whether any complaint can be made about those. Second, the judge had set out in considerable detail the history of the Factortame litigation including the history of the assessment of damages aspect. He of course did so in the context of ruling on various different points, but in his recitation of the history he pointed up certain factors showing that he was seeking to address the question as to the extent to which the amendment had provided an excuse to accept a payment in that should in fact have been accepted earlier. Third, although the focus of attention of the submissions of the claimants, and the defendants, and thus the judge was on the reasons why the EC claimants ultimately wished to accept the payments in after the amendments to the defendants' case, that question is in reality the other side of an equally important question which is, whether the claimants should in fact have accepted the payment in within the 21 day limit extended by the judge to 7 th February, a question into which...
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