England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
THE SUPREME COURT COSTS OFFICE
(MASTER ROGERS)

		Royal Courts of Justice Strand London, WC2 Wednesday, 27 November 2002

1. LORD PHILLIPS, MR: I shall ask Lord Justice Kay to give a short judgment which will make it quite plain why this appeal has been disposed of in this way.
2. LORD JUSTICE KAY: This is an appeal from the decision of Master Rogers given on 31 July 2002 by which he ruled that interest payable by the defendant to the claimant on the entire costs of the action should run from 1 June 1994, the date upon which judgment was entered for the claimant for damages to be assessed, rather than the much later date upon which damages were quantified.
3. The case was an action claiming damages for personal injury suffered soon after birth by the claimant, an infant. She was born on 26 June 1986 at the defendant's hospital in Hereford. Her care following her birth was alleged to be negligent, as a result of which she suffered severe brain damage. Legal aid was obtained to pursue a claim and proceedings commenced in June 1989.
4. In April 1994 liability was admitted and judgment was entered by consent in the following terms:

"That the plaintiff do recover against the defendants damages to be assessed and costs."

5. In June 2001 the issue of quantum was resolved by the parties. On 11 June His Honour Judge Nicholl, sitting as a judge of the High Court, approved a gross award of £2,175,000 inclusive of £250,000 interim payments. Clause F of the terms of settlement which formed part of the approval, and which was made an order of the court, provided:

"The defendant pay the claimant's costs to be subject to detailed assessment (if not agreed) on the standard basis an in accordance with Reg 107 of the Civil Legal Aid (General) Regulations 1989, the claimant's solicitors waiving any claim to further costs."

6. On 31 July 2002 the matter of costs came before Master Rogers. He decided to consider as a preliminary point the date from which interest on the costs should run. The contention advanced on behalf of the claimant was that the interest on the costs ran from April 1994 when the judgement for damages to be assessed was entered. On behalf of the defendant it was argued that the correct date was June 2001 when the judgment for the agreed measure of damages was entered. As Master Rogers observed, the consequences of the claimant's contention were "fairly startling". He calculated that if the costs were of the order of £200,000, interest would amount to approximately £156,000 if the claimant was right.
7. The argument advanced before Master Rogers on behalf of the claimant, was based upon section 17 of the Judgments Act 1838 which, following amendment by Article 3 of the Civil Procedures (Modification of Enactments) Order 1998, provides:

"Every judgment debt shall carry interest ... from such time as shall be prescribed by the rules of court until the same shall be satisfied...."

8. Section 18 of the 1838 Act makes an order for costs a judgment debt within the meaning of section 17. CPR 40.8(1) provides:

"Where interest is payable on a judgment pursuant to section 17 of the Judgments Act 1838 or section 74 of the County Courts Act 1834, the interest shall begin to run from the date that judgment is given unless --

(a) a rule in another Part or a practice direction makes different provision; or.

(b) the court orders otherwise."

9. The contention of behalf of the claimant was that the judgment of April 1994 ordered the defendant to pay the costs of the action. It was argued that the interest on the costs ran from that date.
10. On behalf of the defendant it was submitted that the date of the order giving rise to the entitlement to costs was 11 June 2001, the date of the infant settlement approval hearing when damages were assessed. If that argument was not to be accepted, it was contended that, even if interest on the costs incurred in relation to liability ran from the earlier date, interest on costs in determining quantum should run from the latter date.
11. Neither party suggested to Master Rogers that he had any power to order that the costs run from any different date. Master Rogers concluded on the arguments presented to him that the date from which the interest ran was the date when the original judgment had been entered, June 1994. He clearly recognised that this decision would seem unjust to the defendant in that interest would be carried on a substantial part of the costs for many years before those costs were actually incurred, but he felt compelled by the 1838 Act, as subsequently interpreted by the courts, to reach such a conclusion.
12. Unfortunately, neither party drew to the attention of Master Rogers the provisions of CPR 44.3(6)(g), which provides:

"The orders which the court may make under this rule include an order that a party may pay--

...

(g) Interest on costs from or until a certain date, including a date before judgment."

13. There was thus no need in law for Master Rogers to find himself in the legal straight jacket that the parties had suggested. He had a discretion which enabled him to look at the dates when the costs had been incurred, and to come to a conclusion in relation to the payments of interest that fitted the justice of the circumstances of the particular case. He did not do so because he was not made aware of the possibility of that course. It becomes immediately apparent that the decision that he made cannot stand.
14. Having considered the matter, counsel for the parties (neither of whom appeared before Master Rogers) have now appreciated that that is the situation. They have discussed what would be a fair order pursuant to the rule to which we have referred, and they have been able to agree terms. In those circumstances it is unnecessary for us to consider the matter any further, just as it is unnecessary to consider the rather difficult questions as to what would have been the position under the old law, which now happily is a part of legal history.
15. LORD PHILLIPS, MR: That is the judgment of the court.
ORDER: Appeal disposed of as above on terms agreed between the parties. No order for costs save for detailed assessment of claimant's costs as per Community Legal Services Funding Order.