England and Wales High Court (Senior Courts Costs Office) Decisions

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Cite as: [2015] EWHC B22 (Costs)

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		Neutral Citation Number: [2015] EWHC B22 (Costs)
		Case no: HQ12X02176

IN THE ROYAL COURT OF JUSTICE
SENIOR COURTS COSTS OFFICE

Thomas More
Building Royal Courts of Justice
Strand, London
WC2A 2LL

4 November 2015

B e f o r e :

MASTER SIMONS
____________________

	BRISTOW	Claimant
	- and –
	THE PRINCESS ALEXANDER HOSPITAL NHS TRUST & ORS	Defendants

____________________

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____________________

MR BLACKBURN (instructed by Irwin Mitchell Solicitors) appeared on behalf of the Claimant
MR MARTIN appeared on behalf of the Defendants
____________________

HTML VERSION OF JUDGMENT
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THE MASTER: This is the issue about the costs of the detailed assessment.

A bill was originally lodged for approximately £239,000 and the basic fact is that upon a detailed assessment this was reduced to £135,486.90. The claimants claimed their costs of the detailed assessment under 47.20 in that they say that they have beaten all offers that have been made by the paying party. In addition there was a request that the parties engage in mediation made on 1 April 2015 which was rejected by the defendants, and the claimants therefore seek a sanction for the failure to agree to mediate.

The defendant's case is first of all that the bill claimed items that should not have been claimed and that they have succeeded in obtaining a considerable reduction to the bill and that the appropriate order should be no order for costs. They say they did not enter into the mediation because the parties were so far apart. The claimants were unreasonable in their offers, and the offers that were put forward by the defendants were much closer to the actual settlement than in fact were the offers made by the claimant, and these are the factors that should be taken into account.

Although Mr Blackwell for the receiving party says that there are two separate issues here (first of all the costs of the detailed assessment under 47.20, and secondly about the defendant's failure to engage in mediation), it seems to me that these are one and part of the same issue that is dealt with under 47.20 because I have to take into account all the circumstances of the case and one of the circumstances is the defendant's failure to engage in mediation.

In my judgment there are two basic principles involved here. The first principle is bills of cost should not include claims for items to which a receiving party is not entitled. The second principle is that the parties should be encouraged to enter into mediation and if one party fails to enter into a mediation and that failure is unreasonable then there should be a sanction.

Dealing with the first principle, this claim was originally against five defendants but ultimately the settlement was only against one defendant. The bill specifically makes clear in the narrative that claims in respect of items against the second and the fifth defendants should not be included in the bill. They were included. This should not have happened. To start off with detailed assessment, the notice of commencement does include and the solicitors certified that this is a reasonable bill and that this is an accurate bill and these are the only costs to which the receiving party is entitled. At the time the original bill was served the bill was not accurate. There were included significant amounts which should not have been included in the bill because they related to costs that were incurred specifically in respect of the claims against the general practitioners, which claims were eventually discontinued and formed no part of the settlement. This is wrong and in my judgment is the principle that I have to take into account when dealing with the costs of the detailed assessment.

The second major principle is that parties should be encouraged to enter into mediation, and if they fail to do so unreasonably then there should be a sanction. Despite Mr Martin's eloquence, I am not satisfied that the defendant was reasonable in failing to enter into mediation. I think it was a reasonable request made by the claimant on 1 April 2015. It took three months for them to reject and they gave no good reason other than the fact that the case had already been set down for a detailed assessment.

So my judgment is based on those two principles. Dealing with the first principle, that in 47.20 I have to have regard to all the circumstances including the conduct of all the parties, the amounts (if any) by which the bill of costs has been reduced and whether it was reasonable for a party to claim the costs of a particular item or to dispute that item. It is clear, as I have already indicated, that a fact that I have to take into account is whether it was reasonable for a party to claim the costs of a particular item which was clearly unreasonable, it should not have been done, the claimants were reasonably speedy in accepting the points of reply by making concessions and reducing some of the matters that were claimed in the bill that should not have been claimed. But it is a point of principle here that bills should not include items. There was a certificate in the bill and that certificate is wrong and it is appropriate there should be a sanction.

Furthermore, I take into account that the bill was reduced by approximately 43 per cent. That is unusual in detailed assessments. One usually accepts a reduction in bills of perhaps 33 and a third. A 33-and-a-third reduction is something that is on the high side so a reduction of 43 per cent from the original bill is a factor that I have to take into account.

In all those circumstances, whilst I think that the claimant is entitled to their costs of the detailed assessment, because of the principle that I have enunciated in my judgment they should only be entitled to 80 per cent of their costs.

We now come to the question of mediation and, as I have indicated, in principle the defendants have not given any reasonable reason why they refused to engage in mediation and I am satisfied that there should be an appropriate sanction. I find it very difficult to decide what the sanction should be because, as I indicated in argument with Mr Blackwell, the beneficiary of any sanctions will be the solicitors who have not suffered any particular loss because they are being compensated for the delay by interest at eight per cent, and of course they are receiving profits on the further work that may have been done, so they do not really lose out as a result of the failure to mediate. However, there is a point of principle involved and in my judgment there should be a sanction. I am not satisfied that the sanction should be increased interest because eight per cent interest in this day and age is already a penal rate of interest and the defendant has to bear this very high rate of interest and they are being punished already by their actions because this case could have been settled by mediation.

Nevertheless I am satisfied there should still be a sanction and I think that the correct sanction is that the claimant should receive their costs on an indemnity basis on their 80 per cent costs as a sanction for the defendant's failing to engage in mediation.