England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		15th May 2006

The Honourable Mr Justice Owen :

1. It is common ground that as a consequence of the judgment handed down on 20 January 2006, the claimant will be entitled to damages of the order of £22,600, the precise amount depending upon the date upon which the order is drawn up as interest is continuing to run on the award of general damages. But two issues have arisen as to the claimant's claim to the costs of the action. First there is an issue as to whether the MoD is entitled to set off the claimant's proportionate share of the costs of trial of the generic issues, likely, according to the MoD to amount to a sum of between £7,000 and £10,000. Secondly, there is an issue as to whether the claimant is entitled to recover the whole of the costs of the action.
2. The set-off issue

The MoD claims to be entitled to set-off the claimant's proportionate share of the generic costs against either his costs of his individual action or against his damages. The claimant resists that claim on the basis that he is in a different position from the other claimants in the group litigation in that he has succeeded in what amounts to a clinical negligence action in which the findings, both as to breach of duty and as to causation, were specific to his case. His position is contrasted with that of Mr New and Mr West in that in both of their cases the judgments derived directly from my findings in the trial of the generic issues.

3. The MoD takes issue with the proposition that the claimant is in a different position from others in the group litigation. Whilst it is acknowledged that he has always relied upon an allegation that there was negligence on the part of the treating clinician, Brigadier Wickenden, the defendant argues that he sought to benefit from the arguments advanced on behalf of the claimants in the trial of the generic issues. It is submitted in particular that his case was chosen as a lead case for two reasons, first because it illustrated the generic issue of screening, and secondly it was a relatively late case which could assist the court as to Northern Ireland in the 1990's and the peace keeping operations in Bosnia in 1993. Secondly had the claimant's case on screening been accepted, he would have recovered substantial damages. Thirdly had his case on detection been accepted, his damages would have been greater in that he argued that his condition ought to have been detected after his tour of duty in Northern Ireland and certainly after his tour of duty in Bosnia. Fourthly it is submitted that he sought to benefit from favourable findings in relation to the generic issues of briefing, de-briefing, duty at discharge and treatment; and had the claimants' been more successful in relation to those generic issues, his damages would have been greater. It is submitted that for those reasons his position was and is no different from that of the other claimants within the other group litigation.
4. In response it is submitted on behalf of the claimant that he did not have a choice as to whether or not to be a lead case. He could not have detached himself from the group and run his claim separately. Furthermore resolution of his individual claim was delayed for many years by the creation of the group action and his adoption as a lead case. Whilst it is accepted that claimants who subsequently succeed on the basis of generic findings should bear their share of the costs of the trial of generic issues insofar as they are not recoverable from the defendant, it is submitted that it is wrong in principle to penalise the claimant who has a successful individual claim, not dependent on generic findings, and who was obliged to come within the umbrella of the group litigation thereby serving the larger interests of the group and of the defendants who would otherwise have faced a multiplicity of individual actions.
5. The overriding question is whether it would be fair and just for the MoD to be permitted to make the set-off for which it contends. I have come to the conclusion that in all the circumstances it would not be fair and just for it to be permitted to do so. Whilst the claimant might have derived benefit in the pursuit of his individual action had there been a different resolution of a number of the generic issues, the fact remains that in his individual action he proved that he sustained injury, and consequential loss and damage, as a consequence of negligent treatment by Brigadier Wickenden. He would have succeeded in that action whether or not the generic issues had been litigated. The formation of the group litigation and his involvement in it, as to which he had no real choice, inevitably resulted in a very substantial delay in the resolution of his claim. I am satisfied that the justice of the case requires that neither his own order for costs nor his damages should be subject to a set-off of his share of the generic costs.
6. Is the claimant entitled to recover all of his costs of the individual action?

It is accepted on behalf of the MoD that the claimant is entitled to an order for his costs of the individual action, but is submitted that the order should be limited to 50% of those costs.

7. The background to the submission made on behalf of the MoD is that in early April 2005 the claimant made a part 36 offer of £125,000, and following service of the claimant's schedule of loss on 11 April 2005, the MoD made a part 36 payment of £25,000 on 22 April 2005 but withheld the sum of approximately £10,000 on account of CRU. In the event the MoD's part 36 payment was not effective as the claimant recovered only general damages which are not affected by CRU. Thus the part 36 payment was worth of the order of £15,000 to the claimant.
8. In support of its submission the MoD invites me to take the following points into account:

i) The claim, as advanced in the schedule of loss and damage, was for a sum in the region of £325,000.

ii) The claimant failed in relation to his claims for past and future loss of earnings, for damages under the Smith v Manchester head, and for loss of pension, and succeeded only in his claim for general damages.

iii) A considerable part of the trial was taken up with arguments over causation, primarily in the expert evidence; the claimant lost the majority of these arguments because he only succeeded in demonstrating some causation in relation to general damages for pain suffering and loss of amenity.

iv) A considerable part of the trial was devoted to legal argument as to the scope of the Clunis principle, an issue which the claimant lost.

v) Taking the part 36 offers as the yard sticks, the claimant's valuation of his claim was five times greater than the sum recovered, whereas the defendant's valuation was only 30% out.

9. In response it is submitted on behalf of the claimant that but for the outcome of the Clunis issue, his part 36 notice would have been a sensible and modest valuation of the claim. In addition to seeking to distinguish Clunis on the facts, the claimant has throughout reserved his position as to whether Clunis is correctly decided. But it is further submitted that in any event and notwithstanding the Clunis issue, the claimant would still have been correct to reject the defendant's offer.
10. It is further submitted on behalf of the claimant that if the part 36 offer system is to operate properly, it should not be weakened by loss of clarity as to the impact of an offer. The effect of a part 36 offer should be decisive unless there are strong reasons to the contrary. If that approach is not maintained then there will inevitably be an increase in satellite litigation as to costs. In this context my attention was drawn to Blake Estates Ltd v Monserrat [2006]1WLR297. The case concerned compensation for land on the island of Monserrat that had been made subject to compulsory purchase in the wake of the volcanic eruption of 1995. The landowner claimed a much larger sum than the initial valuation. The relevant tribunal made an award larger than the initial valuation but substantially below the sum claimed. As a result it ordered that the landowner recover only 65% of its costs. Following the decision of the Court of Appeal in Purfleet Farms Ltd v Secretary of State for Transport [2002] 43EG204(CS), the Privy Council held that the principles set out in CPR 44 were applicable to the Tribunal's approach to costs, and that:

"A claimant should prima facia be entitled to his full costs of preparing and presenting his claim. The Board of Assessment's discretion to reduce the award from the payment of full costs should be exercised judicially. If it holds that the claim was grossly excessive, it is necessary for the Board then to enquire whether the exaggeration gave rise to an obvious and substantial escalation in the costs over and above those which it was reasonable for the claimant to incur. If it is satisfied that this was the case, then it is open to the Board to exercise its discretion to deprive the claimant of part of his costs. The amount of departure from full payment of the payment's costs should be proportionate, having regard to the waste of time and costs properly attributable to the claimant's acts or omissions." Per Lord Carswell at paragraph 25.

11. It is submitted that in this case there has been no exaggeration, still less any waste of costs, and that the claimant failed in a substantial part of his claim by the operation of a point of law rather than by any finding of fact. It is submitted that he won every issue on liability and every factual issue on causation, and that he was successful on the great majority of the factual issues on quantum. It is submitted that he was fully justified in arguing the Clunis point, and that it was therefore necessary to prepare and present his claim on the premise that that argument would be successful. Accordingly it would be unfair to deprive him of any part of his costs given that he beat the part 36 payment.
12. In response the MoD invited my attention to two decisions of the Court of Appeal, Islam v Ali (2003)EWCA Civ.612 and Alison v Brighton and Hove City Council (2005)EWCA Civ.548. In Islam and Ali the principal judgment was given by Lord Justice Auld. At paragraph 18 he said:

"The general rule is that an unsuccessful party should pay the successful party's costs; see Civil Procedure Rules part 44.3 (2(a). The trial Judge, however, has a wide discretion in furtherance of the overriding objective of justice and fairness to make a different order; see Civil Procedure Rules part 44.3(2)(b). In exercise of that discretion the judge should have regard to all the circumstances, including the conduct of the parties, for example, how they have respectively pitched and pursued their cases and whether a party has succeeded on part, if not all, of his case and to any payment in or offer made. I take that, with the examples I have added, from CPR part 44.3(5)."

13. In Islam v Ali the court of Appeal allowed the defendant's appeal against the order for costs on the basis that although there had been judgment against her in the sum of £12,746.41, she had won the case in principle, a factor to which the trial Judge had failed to have due regard. It is accepted on behalf of the MoD that in this case the outcome could not be characterised in quite those terms. That is a realistic concession. It cannot be said that the MoD won the case in principle, the claimant having succeeded in establishing breach of duty and consequential injury, both of which were disputed.
14. I accept the submission made on behalf of the claimant that but for the outcome of the Clunis issue, his part 36 notice would have been a sensible and modest valuation of the claim. Secondly the claimant failed in his claims for past and future loss of earnings and for damages under the Smith v Manchester head in part as a consequence of the application of the Clunis principle and in part by failing to establish causation. As to the Clunis issue, I consider that the claimant was justified in running it to trial. It follows that he was justified in pleading, and in attempting to prove, the losses that he would have recovered but for its application. As to causation, resolution of his claims to past and future loss of earnings and under the Smith v Manchester head did not in my judgment add significantly to the costs, as the evidence upon which they turned, namely the evidence as to the claimant's psychiatric condition and its complex aetiology, had in any event to be adduced in relation to the issue of liability, and to the claim for general damages for pain, suffering and loss of amenity.
15. In all the circumstances I am not persuaded that there should be any reduction in the costs to be recovered by the claimant. The interests of fairness and justice require that the claimant should be entitled to his costs in full.
16. Leave to Appeal

The claimant seeks leave to appeal against my ruling on the Clunis issue. Notwithstanding my view that it was reasonable for the claimant to advance the Clunis argument, I do not consider that there is a realistic prospect of success in the appeal, and leave is therefore refused.