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

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		30/07/2009

Mr Justice Roderick Evans :

1. The present dispute relates to the costs of the hearing of 23 April 2009. That was a hearing at which submissions were made about the costs of the case. I have ruled on those submissions. The effect of my ruling is that, with the exception of the claimant's application to adduce further evidence after each party had closed its case, the defendant should pay the claimant's costs of the case on the standard basis save that the claimant's costs attributable to dealing with the evidence of Dr Gross and Mr Hay should be assessed on the indemnity basis.
2. On 21 April 2008, just two days before the costs hearing, the defendant wrote to the claimant as follows:

"This letter contains an offer on costs. We are instructed to offer settlement of costs in this action on the following terms: -

1. Except as provided for in paragraph 2 below, the defendant shall pay the claimant's costs of this action on the standard basis subject to detailed assessment if not agreed and to be paid within 21 days of agreement or assessment.

2. The defendant shall pay the claimant's costs on an indemnity basis from 7 April 2008 to 30 April 2008.

This offer is open for acceptance until 10am on 23 April 2009."

3. The effect of this offer was, therefore, that the defendant would abandon its argument that the claimant should recover only 60% of her costs of the litigation and offered to pay indemnity costs for the period from the date upon which Dr Gross's wrongful behaviour in respect of Dr Harvey's report became known to the defendant up to the end of the hearing of the case. The claimant rejected the offer and made no counter offer.
4. The defendant now submits that the claimant should pay the costs of the 23 April hearing. The argument is that the letter of 21 April offered the claimant a better outcome on costs than she obtained from my ruling; she failed to beat the offer. Alternatively, if an arithmetical comparison of offer and outcome is difficult at this stage, the offer made by the defendant was generous and reasonable and the claimant has obtained no clear benefit from the oral hearing or any benefit she has obtained is not worth the cost of the oral hearing. A further alternative, referred to as a fallback position, is suggested by the defendant and that is that there should be no order as to the costs of the hearing of 23 April.
5. The counter arguments made on behalf of the claimant are set out in a witness statement made by Mr Dickinson on 7 July 2009. He makes three points which can be briefly summarised as follows.
6. Firstly, the defendant's offer of indemnity costs related only to the trial costs and they, it is said, are likely to be relatively uncontroversial. The brief fee of the claimant's counsel was agreed before 7 April and the trial costs including counsel's refresher fees, the attendance of her solicitor and of the experts are likely to mirror those of the defence. The defendant does not accept the accuracy of this submission and I have been referred to aspects of the claimant's trial costs as set out in her bill of costs which the defendant says will be the subject of significant challenge.
7. Mr Dickinson goes on to give detail of the work which he says was necessary to counter the allegation of malingering which was made by Dr Gross and Mr Hay and says that collating evidence to rebut this allegation took "a disproportionate number of hours" pre-trial. His contention is that the order I made is significantly more valuable to the claimant than the defendant's offer.
8. Secondly, he points out that counsel's brief fee for the hearing on 23 April 2009 had been agreed before the defendant's offer was received. The claimant was, therefore, contractually bound to pay the agreed fee and each of the orders proposed by the defendant would result in the claimant herself having to pay counsel's brief fee which would be unjust.
9. Thirdly, it is submitted that the claimant's judgement in proceeding with the application for costs despite the defendant's offer was vindicated as all of the defendant's criticisms of her were dismissed by me and I accepted in large part the thrust of her criticisms of the defendant's conduct of the litigation. In particular I accepted the unsatisfactory way in which the defendant had failed to control or reality test the evidence of Dr Gross and Mr Hay which had prompted the application for indemnity costs. In asking the fundamental question "who was the real winner" of the hearing of 23 April the answer, Mr Dickinson contends, is undoubtedly the claimant.
10. It is not possible for me to conduct a preliminary assessment of costs to establish arithmetically whether the defendant's offer was better on a pound for pound basis than the outcome achieved by the claimant. That is a matter for the costs judge and it is unlikely to be an exercise without its complications. I have to take a broad view of the issues to establish where justice lies.
11. Two matters about the offer made by the defendant are significant. Firstly, the defendant's willingness to abandon its argument that the claimant should recover only 60% of her costs confirms the view I expressed in my ruling on costs that the 60% argument was no more than a tactic adopted by the defendant. That is an unattractive way of conducting litigation. Secondly, the defendant's willingness to pay indemnity costs was premised on only one aspect of Dr Gross's conduct and wholly ignored the conduct of Mr Hay. I am left wondering whether the defendant appreciated the seriousness of the conduct of these two doctors even after reading my judgement.
12. I have no doubt that the justice of this case requires the defendant to pay the claimant's costs of the hearing on 23 April together with the costs of the subsequent dispute as to the costs of that hearing on the standard basis.
13. I attach the final costs order.
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ORDER ______________________________________________

UPON hearing Counsel for both Parties and upon it being recorded that the Court has already ordered the Defendant to pay the Claimant £300,000 on account of costs in an Order dated 8 October 2008,

IT IS ORDERED THAT:

14. The Claimant's costs of the case, to include the costs of and occasioned by the Costs Hearing on 23 April 2009, be paid by the Defendant on the standard basis, to be assessed by way of detailed assessment if not agreed, subject to paragraphs 2 and 3 below.
15. The costs of and occasioned by the Claimant's Application to adduce further evidence after each party had closed its case to be paid by the Claimant in any event, to be assessed on the standard basis if not agreed and to be set off against the Claimant's entitlement to her costs of the action.
16. The Claimant's costs attributable to dealing with the evidence of Dr Gross and Mr Hay be assessed on the indemnity basis.
17. The Defendant shall pay the Claimant the sum of £150,000 on account of the Claimant's remaining costs by 4 pm on 13 August 2009.