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
		28/09/2018

Mrs Justice Yip:

1. I handed down the substantive judgment in this case on 25 July 2018 (see [2018] EWHC 1917 (QB)). Following that judgment, the parties were able to agree the calculation of damages, but some issues remained as to other consequential orders. I heard submissions in relation to the outstanding issues on 10 September 2018. The parties invited me to deal first with an issue as to whether the provisions of CPR 36.17(4) should apply. I dealt with this by way of an oral ex tempore judgment, concluding that the Part 36 offer relied on was made less than 21 days before trial and therefore r. 36.17(4) did not apply by virtue of r. 36.17(7)(c).
2. Having given my judgment on that issue, the parties then addressed me as to the exercise of my general discretion in relation to costs under Part 44. Due to the lateness of the hour at which submissions were completed, I had to reserve my judgment on the final aspects to be determined, namely the appropriate order for costs and the amount of the payment on account of costs.
3. Following my rejection of the applicability of r.36.17(4), Mr Limb contended that the appropriate costs order was "The Defendant shall pay the Claimant's costs of the action upon the standard basis. Such costs to be subject to a detailed assessment if not agreed and payable within 28 days of assessment or agreement." He sought a payment on account of £250,000.
4. Mr Counsell QC for the Defendant seeks a (limited) departure from the general rule that the unsuccessful Defendant should pay the successful Claimant's costs. He concedes that the Claimant should recover the greater share of her costs but invites me to reflect the fact that she did not succeed on that part of her case that related to consent and pre-operative issues. As I indicated at paragraph 3 of my judgment, the Claimant withdrew that aspect of her case at trial.
5. CPR 44.2 deals with the court's discretion as to costs. Sub-paragraph (2) states:

"If the court decides to make an order about costs –

(a) the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party; but

(b) the court may make a different order."

6. Guidance as to how the discretion is to be exercised is contained in sub-paragraphs (4) and (5):

"(4) In deciding what order (if any) to make about costs, the court will have regard to all the circumstances, including –

(a) the conduct of all the parties;

(b) whether a party has succeeded on part of its case, even if that party has not been wholly successful; and

(c) any admissible offer to settle made by a party which is drawn to the court's attention, and which is not an offer to which costs consequences under Part 36 apply.

(5) The conduct of the parties includes –

(a) conduct before, as well as during, the proceedings and in particular the extent to which the parties followed the Practice Direction – Pre-Action Conduct or any relevant pre-action protocol;

(b) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;

(c) the manner in which a party has pursued or defended its case or a particular allegation or issue; and

(d) whether a claimant who has succeeded in the claim, in whole or in part, exaggerated its claim."

7. Sub-paragraphs (6) and (7) deal with the orders which the court may make:

"(6) The orders which the court may make under this rule include an order that a party must pay –

(a) a proportion of another party's costs;

(b) a stated amount in respect of another party's costs;

(c) costs from or until a certain date only;

(d) costs incurred before proceedings have begun;

(e) costs relating to particular steps taken in the proceedings;

(f) costs relating only to a distinct part of the proceedings; and

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

(7) Before the court considers making an order under paragraph (6)(f), it will consider whether it is practicable to make an order under paragraph (6)(a) or (c) instead."

8. The provision for a payment on account of costs is to be found in sub-paragraph (8):

"Where the court orders a party to pay costs subject to detailed assessment, it will order that party to pay a reasonable sum on account of costs, unless there is good reason not to do so."

9. In Fox v Foundation Piling [2011] EWCA Civ 790, Jackson LJ said:

"62. There has been a growing and unwelcome tendency by first instance courts and, dare I say it, this court as well to depart from the starting point set out in rule 44.3 (2) (a) too far and too often. Such an approach may strive for perfect justice in the individual case, but at huge additional cost to the parties and at huge costs to other litigants because of the uncertainty which such an approach generates. This unwelcome trend now manifests itself in a (a) numerous first instance hearings in which the only issue is costs and (b) a swarm of appeals to the Court of Appeal about costs, of which this case is an example."

10. The numerous authorities relating to the circumstances in which "issue-based" orders may be appropriate are helpfully summarised in the notes at paragraph 44.2.10 of the current edition of the White Book. Having reviewed the authorities and noted the criticism of the tendency to depart from the starting point in CPR 44.2(2)(a) too far and too often, the editors set out five propositions which they say "may be derived from the authorities and which may be stated with a degree of confidence". Omitting the citation of the authorities which support them, the principles set out there are as follows:

"1. The rules themselves impose no requirement to the effect that an issue-based costs order should be made only "in a suitably exceptional case", and none is to be implied, although "there needs to be a reason based on justice" for departing from the general rule, and that the question of the extent to which costs of a particular issue are to be disallowed should be left to the evaluation and discretion of the judge, "by reference to the justice and circumstances of the particular case" …

2. The reasonableness of taking failed points can be taken into account, and the extra costs associated with them should be considered …

3. Where the circumstances of the case require an issue-based order in the form of an order expressed by reference to the costs of the issue, that is what the judge should make; however, generally, because of the practical difficulties which this causes, the judge should hesitate before doing so and, where practicable, the order should be expressed as a percentage or with reference to a distinct period of time …

4. There is no automatic rule requiring an issue-based cost order in the form of a reduction of a successful party's costs if he loses on one or more issues … The mere fact that the successful party was not successful on every last issue cannot, of itself, justify an issue-based costs order …

5. The courts recognise that in any litigation, especially complex commercial litigation but including personal injury litigation, any winning party is likely to fail on one or more issues in the case (possibly issues on which the losing party could have taken steps to protect himself, at least to an extent, to costs liability) ..."

11. I am satisfied that these propositions accurately reflect the authorities and I approach the exercise of my discretion with such principles in mind.
12. I was referred to Webb v Liverpool Women's Hospital NHS Foundation Trust [2016] EWCA Civ 365, in which the Court of Appeal considered an issues-based order in a clinical negligence case in which an effective Part 36 offer had been made. In those circumstances, the Court of Appeal highlighted the need to address separately costs incurred before and after the "effective date" for the purpose of Part 36. Given my earlier findings as to the Part 36 offer in this case, the relevant part of the judgment is paragraphs 24 to 29. However, I consider that there is also some benefit in looking at the approach under Part 36 whereby a successful claimant who is able to rely on a Part 36 offer is to be deprived of all or part of her costs only if the court considers that it would be unjust for her to be awarded all or that part of her costs. As with the discretion under Part 44, this requires the court to have regard to "all the circumstances of the case".
13. At paragraph 38 of Webb, Sir Stanley Burnton referred to principles summarised by Briggs J (as he then was) in Smith v Trafford Housing Trust [2012] EWHC 3320 (Ch). It seems to me that the second principle, derived from Factortame v Secretary of State [2002] EWCA Civ 22, at paragraph 27 is a useful one to have in mind in exercising my discretion under Part 44:

"Each case will turn on its own circumstances, but the court should be trying to assess "who in reality is the unsuccessful party and who has been responsible for the fact that costs have been incurred which should not have been."

14. With the principles set out above in mind, I turn to the particular circumstances of this case.
15. This was a complex clinical negligence action in which there were numerous overlapping issues on liability as set out at paragraph 33 of my substantive judgment. There were also many quantum issues. Determination of some, but not all, of the quantum issues depended on my findings on breach and causation. Liability and quantum were tried together.
16. The Claimant was undoubtedly the successful party. She had suffered serious complications following bariatric surgery. She set out to prove that she should be compensated both for those complications and for the loss of the benefits that would have resulted from successful surgery, including substantial weight loss and a significant improvement in her physical condition compared to the pre-surgery position. That was the outcome of the trial.
17. Aside from the consent issue, the Claimant did not win every point. One of the allegations of surgical negligence (the use of a Foley catheter) was also withdrawn by the Claimant at trial. I rejected some of the Claimant's arguments on quantum. There is nothing unusual about a claimant in a clinical negligence action succeeding on some, but not all, allegations of breach of duty and not recovering every item of loss contended for. It would be wholly inappropriate for the court to be asked to look at the costs referable to each issue on which the Claimant was unsuccessful. That is not the approach taken by the Defendant here. Mr Counsell readily accepts that these other issues are all part of the normal run of a clinical negligence claim and that no criticism can be made of the Claimant or her lawyers for pursuing them. Quite rightly, there is no suggestion that the 'loss' of any other issue should have any impact on the order for costs.
18. The Defendant maintains that the position is different in relation to the consent allegations. It is argued that they constituted a discrete and major part of the case, which added significantly to the costs, and which it was not reasonable for the Claimant to pursue. Mr Counsell contended that the costs relating to the consent issue were suitably circumscribed and that the Claimant should be deprived of her costs of that issue and be required to pay the Defendant's costs of defending the allegations.
19. One of the difficulties with the Claimant's case on consent was that it was never fully or properly articulated. I asked Mr Limb when he opened his case, and more than once thereafter, to clarify the basis on which this part of the claim was maintained. After the second day of trial, he produced a document headed "Claimant's case on consent – outline". Even having seen this, I was still not sure how the case on causation would be put, even if the alleged breach was established. Frankly, the document was somewhat vague.
20. The factual circumstances applicable in considering the consent issues were unusual. The Claimant underwent open rather than laparoscopic surgery. Her case was that, absent a clinical reason, laparoscopic surgery was the appropriate form and that she should have been told this. The Claimant did know that surgery could be open or laparoscopic. She knew that funding was not available for laparoscopic surgery at the Defendant's hospital. She believed that she could have had the surgery laparoscopically at another hospital in Stoke, although on the evidence I heard I am doubtful this was right. This was not the typical case in which a risk about which the patient has not been warned materialised. The risks inherent in the surgery were not increased by doing an open rather than a laparoscopic operation. Open surgery simply meant that there would be more post-surgical pain and a longer recovery period. The Claimant knew this. She would have preferred to have laparoscopic surgery and she would have preferred to be admitted to a hospital closer to home. However, even if that was possible, it would have resulted in delay and she was not willing to wait.
21. Even if the alleged breach was made out, it was far from clear where that took the Claimant's case. The experts agreed that if her surgery had been done laparoscopically, it might have been easier to detect the symptoms of the anastomotic leak. In simple terms, alarm bells would have rung earlier because the pain to be expected following laparoscopic surgery is less and therefore the pain attributable to the leak would not have been discounted as post-surgical pain. However, there was no question of the surgery being done laparoscopically at Walsall. The PCT would not fund it.
22. The Claimant never advanced a clear case that, but for the Defendant's alleged breach, she would not have had the open surgery which was available at Walsall. Even if possible to discern a theoretically arguable case based on lack of consent from the pleadings and material in the trial bundle, it would have been wholly blown away by the Claimant's own evidence (on Day 2 of the trial) that she had been advised in robust terms by the surgeon at Stoke that nobody should have open rather than laparoscopic surgery "in this day and age"; she knew there was no option but to have open surgery at Walsall and decided to go ahead as she did not want to delay or to lose further weight as would have been required before undergoing surgery at Stoke.
23. Had it been necessary to decide the issue, I would have concluded on the basis of the evidence called by the Defendant and the contemporaneous medical records that the allegations of breach of duty in relation to consent were not made out. However, this part of the case was properly withdrawn albeit not until the fourth day of the trial after all the non-expert evidence had been called.
24. Of course, I make no criticism of Mr Limb for conceding this issue. It is often highly appropriate for issues to be conceded once the evidence has been heard. The point is that this was not the ordinary situation where one part of a party's case is stronger than another and depends on consideration of the evidence at trial. The overwhelming impression I had was that proper consideration had not been given on the Claimant's side as to how the consent allegations could be maintained on the evidence (taken at its highest) within the correct legal framework. This part of the case was not just weak; it was not properly arguable.
25. An allegation that surgery has been performed without properly informed consent is a serious one. The allegation having been made, the Defendant responded to it by calling six witnesses who would not otherwise have been required. Mr Mirza, the treating surgeon, also dealt with the consent issue although he would have given evidence anyway.
26. Mr Counsell suggested that the consent issue occupied two days of the total trial length. Certainly, I felt at the time that a lot of time was being spent on an issue that was taking the Claimant's case nowhere and, in reality, was distracting from the real issues. This is very different from the situation in Webb where the Court of Appeal thought the allegations relating to the second issue had been dealt with briefly and that "there could not have been much in the way of costs attributable to them."
27. I regard the pursuit of the consent issue in this case as something out of the ordinary. It is not simply that the Claimant lost this issue but rather that it was not reasonable for her to maintain it through to trial.
28. It may be arguable that it was not unreasonable to initially raise issues as to consent and the decision to proceed to open surgery. It is understandable that, having suffered terrible complications of open surgery and having been told at Stoke that surgery should be done laparoscopically in the modern era, the Claimant would question the pre-operative advice she got at Walsall. The case as to the pre-operative stage evolved during the litigation. There was some expert support for the notion that open surgery should not have been performed. I do not think it can be said that this issue should have been discounted without investigation from the outset. The response to the letter of claim did not fully explain the Defendant's position on this issue. However, this did clearly emerge from the pleadings (including the Defence and a Reply to a Part 18 Request). Once witness statements had been exchanged in February 2017, the position had crystallised. In my judgment, it was unreasonable to continue to press on with this issue thereafter. It ought to have been obvious that a case on consent could not be made out and that persisting with that aspect would add significantly to the length of trial.
29. The consent allegations did not have a significant impact on the monetary value of the claim. At best, it might have been argued that some additional scarring and initial pain and suffering flowed from having open rather than laparoscopic surgery. However, it is clear from all I have seen and heard that this was never a real target of the claim. The real value of the claim lay in establishing that, but for the Defendant's negligence, the Claimant would have benefitted from successful surgery.
30. The Defendant had made some limited admissions and therefore accepted that some damages were payable. The parties had made attempts to settle. There had been a mediation. Both parties made monetary offers. The Claimant's was too high; the Defendant's too low. The judgment sum lies between the two.
31. The Claimant also made on offer on liability, which I dealt with in my separate judgment considering the application of CPR 36.17. I repeat the terms of that offer, since I consider it to be relevant to the exercise of my discretion under Part 44:

"This is an offer on "liability" meaning breach of duty and consequent absence of the benefits of paragraph 4(a) in Particulars of Claim and presence of injury consequent upon the January 2012 surgery. The Claimant offers to settle for 80% of damages following a finding of "liability"."

32. There was some dispute as to precisely what that offer meant or indeed whether any clear meaning could be discerned. However, looked at in the context of the case as a whole, it is plain to me that the Claimant was seeking 80% of the damages to be assessed on the basis that the Defendant's breaches caused the serious complications after the surgery in January 2012 and the loss of the benefits of successful surgery.
33. The terms of the Claimant's offer fit with my view as to the target of the claim for damages. It also lends support to my view that this is not a case where the Claimant has been only partially successful.
34. Looked at overall, it is clear that the Claimant was the undisputed "winner" in this litigation. However, in assessing "who has been responsible for the fact that costs have been incurred which should not have been", the costs associated with the consent issue call for particular consideration.
35. I agree with Mr Counsell that no criticism can be made of the Defendant's conduct of the litigation. I also agree with his observation that the Defendant's side permitted the Claimant some leeway in how her case was conducted.
36. For the reasons set out above, I do consider that the way in which the consent issue was pursued on the Claimant's side was unreasonable. In saying this, I do not suggest any form of professional misconduct or impropriety but the reference to "conduct" in the rules is wider than this. CPR 44.2(5)(b) requires consideration of whether it was reasonable to pursue a particular allegation or issue. I have concluded that it was not reasonable to persist with the consent issue.
37. Mr Counsell told me that the Defendant had asked whether the Claimant really did require all the Defendant's witnesses to attend for cross-examination. The Claimant insisted this was necessary. The need for all the witnesses to attend undoubtedly added to the trial length and therefore to the costs on both sides.
38. The conduct of the Claimant in pursuing this issue is not the only relevant consideration though. I must also put into the balance my assessment that the Claimant did effectively succeed on a full liability basis and that the Defendant's 'success' on this one issue did not have any substantial impact on the monetary claim. The Defendant could have protected itself on costs as a whole, including the costs referable to the consent issue, by making a sufficient monetary offer.
39. I also take account of the liability offer made by the Claimant, albeit at a late stage. It was made a little too late to be considered an effective Part 36 offer. I do not know to what extent the trial costs had been incurred by then. I doubt there was any huge increase in costs liability between the Friday afternoon and the Tuesday morning after the Bank Holiday. I have set out my interpretation of the offer above. Given the limited impact the consent issue had on the damages claim, even if it was viewed as 80% of the losses attributable to every pleaded allegation, it still represented a better outcome for the Defendant than the result after trial. Had the Defendant thought it necessary, clarification could have been sought and I am confident the Claimant would have been willing to agree that the offer carried no implied admission on the consent issues. Acceptance of the offer therefore represented another way in which the Defendant could have limited the trial costs.
40. In the circumstances, I do not consider it appropriate to attempt to divide up the costs relating to the consent issue and to make the Claimant liable for all such costs, as the Defendant invites me to. The Defendant suggests that approximately 30% of its costs relate to the consent allegations and that I should make an order that effectively provides for the Claimant to be responsible for 30% of the costs on both sides. I accept that the calculation put forward by the Defendant is put forward in good faith and represents a genuine attempt to split out the costs of the consent issue. However, I do not accept that is the appropriate approach.
41. Equally, I do not accept the Claimant's suggestion that I should limit any costs for which she is liable to at most 10% of the 'time costs' relating to trial and trial preparation. That would represent a very modest sum. If I thought that was the extent of the costs wasted by the Claimant's conduct on the consent issue, I would probably be persuaded not to depart from the usual order.
42. My approach in exercising my discretion is to say that the Claimant has overwhelmingly been the winner in the litigation. This was a claim for damages and the Defendant could have secured costs protection by making a sufficient Part 36 money offer and/or by admitting that it was liable to compensate the Claimant including for the loss of the benefits of successful surgery. The Claimant's offer provided a further opportunity to save costs, particularly trial costs relating to liability. That encompassed the costs of the consent issue. On the other hand, pursuing the consent issue without proper consideration of the available evidence within the correct legal framework, added unnecessarily to the total costs expended on both sides. The Claimant must bear responsibility for that. I consider that it would be unjust to ignore this in the costs order I make.
43. The starting point that the unsuccessful party pays the successful party's costs remains strong. However, the circumstances I have identified lead me to a limited departure from the general rule. Having weighed all the circumstances, I have decided that the appropriate order is that the Defendant should pay 85% of the Claimant's costs, to be agreed or assessed.
44. In arriving at that percentage, I have looked at the approved costs budget for each party. I have considered how the costs break down and thought about the parties' conduct as it relates to the various costs stages. I have acknowledged that the Claimant may initially have been acting reasonably in exploring the consent issue and that there is scope for disagreement as to which costs might be properly allocated to the consent issue. I do not pretend to have conducted any precise mathematical analysis. Rather, I have reached a judgment as to how best to do justice between the parties considering all the circumstances I have identified. The result is that the Claimant will be responsible for a meaningful proportion of her own costs to reflect the wasted expenditure on both sides in relation to the consent issue. However, in line with the general principle that the unsuccessful party pays the costs, the Defendant will be paying the bulk of the Claimant's costs and all its own costs.
45. I suspect that the Defendant will consider that I have not moved far enough from the general rule and that the Claimant will maintain that I should not have moved at all. However, standing back and taking a broad view in the particular circumstances of this case, I consider that it is fair that the Claimant should recover most, but not all, of her costs.
46. Taking account of the total sum in the Claimant's approved costs budget and noting the breakdown between incurred and estimated costs there, I consider the sum of £250,000 which the Claimant sought by way of a payment on account of costs, would have been entirely reasonable had I ordered the Defendant to pay her costs in full. In light of the 15% reduction I have ordered, I reduce the sum to £212,500.
47. Since circulating this judgment in draft, I have been told that the Defendant made a payment on account of costs in the sum of £100,000 on 13 September 2018.  That sum falls to be deducted from the sum of £212,500 so that the Defendant will be required to make a further payment of £112,500.
48. I am grateful to the parties for agreeing the terms of an order to reflect this judgment and I make an order in those terms, namely:

i) The Defendant shall pay 85% of the Claimant's costs of the action on the standard basis, such costs to be subject to a detailed assessment if not agreed, and payable within 28 days of assessment or agreement.

ii) The Defendant shall pay the Claimant the sum of £112,500 on account of costs (£100,000 having already been paid on 13 September 2018) by 4 pm on 11 October 2018.