QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Strand, London, WC2A 2LL
B e f o r e :
| DERRICK BARR AND OTHERS
|- and -
|BIFFA WASTE SERVICES LIMITED
1st Floor, Quality House, 6-9 Quality Court
Chancery Lane, London WC2A 1HP.
Tel No: 020 7067 2900, Fax No: 020 7831 6864, DX: 410 LDE
Mr Ian Croxford QC (instructed by Nabarro LLP) for the Defendant
Hearing dates: 19th April 2011
Crown Copyright ©
Mr Justice Coulson:
"The reason again is obvious. The more complicated and technical the facts, the longer and more expensive would be this court's enquiry, whether by review or re-hearing, and the more disproportionate would be the whole exercise for the parties and the court alike."
LIABILITY FOR COSTS
a) The Successful Party
"(1) The court has discretion as to –
(a) whether costs are payable by one party to another;
(b) the amount of those costs; and
(c) when they are to be paid.
(2) 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.
(4) In deciding what order (if any) to make about costs, the court must have regard to all the circumstances, including –
(a) the conduct of all the parties;
(b) whether a party has succeeded on part of his case, even if he has not been wholly successful; and
(c) any payment into court or 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 his case or a particular allegation or issue; and
(d) whether a claimant who has succeeded in his claim, in whole or in part, exaggerated his claim.
(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) Where the court would otherwise consider making an order under paragraph (6)(f), it must instead, if practicable, make an order under paragraph (6)(a) or (c).
(8) Where the court has ordered a party to pay costs, it may order an amount to be paid on account before the costs are assessed."
"Costs consequences following judgment
(1) This rule applies where upon judgment being entered –
(a) a claimant fails to obtain a judgment more advantageous than a defendant's Part 36 offer; or
(b) judgment against the defendant is at least as advantageous to the claimant as the proposals contained in a claimant's Part 36 offer.
(2) Subject to paragraph (6), where rule 36.14(1)(a) applies, the court will, unless it considers it unjust to do so, order that the defendant is entitled to –
(a) his costs from the date on which the relevant period expired; and
(b) interest on those costs.
(3) Subject to paragraph (6), where rule 36.14(1)(b) applies, the court will, unless it considers it unjust to do so, order that the claimant is entitled to –
(b) his costs on the indemnity basis from the date on which the relevant period expired …
(4) In considering whether it would be unjust to make the orders referred to in paragraphs (2) and (3) above, the court will take into account all the circumstances of the case including –
(a) the terms of any Part 36 offer;
(b) the stage in the proceedings when any Part 36 offer was made, including in particular how long before the trial started the offer was made;
(d) the conduct of the parties with regard to the giving or refusing to give information for the purposes of enabling the offer to be made or evaluated."
b) The CPR Part 36 Position
(i) On 16th November 2009, the claimants' solicitors made a global Part 36 offer, to the effect that the claimants would accept the sum of £549,181 plus costs.
(ii) On 7th December 2009, the defendant's solicitors responded, offering 22 of the claimants the sum of £1,000 each plus their share of the costs; offering 82 claimants a 'drop-hands' offer; and offering the remaining 52 claimants (whose claims the defendant considered to be the weakest) an offer pursuant to which those claimants paid 50% of the defendant's costs of defending their claims. Those offers were rejected on 9th February 2010.
(iii) On 15th September 2010, the claimants' solicitors made another global Part 36 offer, to the effect that the claimants would accept the sum of £2,370,000 inclusive of costs. At that stage, the negligence allegations remained in play.
(iv) On the same day, the claimants' solicitors made a Part 36 offer in respect of each individual claimant in the total sum of £432,933.41 plus costs. The individual figure for Mr Hobbs was £3,500-odd, and for Mr Clark it was put at just under £2,000.
(v) On 9th November 2010, those two offers were rejected by the defendant's solicitors, who repeated the terms of their Part 36 offer of 7th December 2009 (subparagraph (ii) above).
e) Summary on Costs Liability
BASIS FOR ASSESSMENT OF COSTS
(i) Unreasonable conduct "to a high degree" is necessary for an order for indemnity costs: see Kiam v MGN Limited [No. 2]  2 AllER 242. In Excelsior Commercial & Industrial Holdings Limited v Salisbury Hammer Aspden & Johnson (A Firm)  EWCA Civ 879, the Court of Appeal said that an order for indemnity costs was appropriate only where "there was some conduct or some circumstance which took the case out of the norm".
(ii) The pursuit of claims which could be fairly described as "speculative, weak, opportunistic or thin" gives rise to a high risk that, if the claim fails, indemnity costs will be ordered: see Tomlinson J (as he then was) in Three Rivers District Council & Ors v The Governor & Company of the Bank of England  EWHC (Comm) 816 at paragraph 25 and Gloster J in JP Morgan Chase Bank & Ors v Springwell Navigation Corp  EWHC 2848 (Comm) at paragraph 7.
(iii) A claimant's refusal of a defendant's Part 36 offer which the claimant subsequently fails to beat may, subject to the Court's discretion, be determinative of his liability to pay indemnity costs: see Reid Minty (A Firm) v Taylor  2 AllER 150. But it should not be thought that it is generally appropriate to condemn in indemnity costs those who decline reasonable settlement offers: see Kiam and Excelsior.
b) Matters Relied On
(a) the defendant was successful on the broad totality of the issues;
(b) the court concluded on the facts that only seven of the lead claims were even arguable;
(c) the manner in which the claimants' claims were presented meant they were doomed to fail;
(d) the claimants would have been better off if they had accepted the defendant's offer of December 2009. The claimants' offers were based on an utterly unrealistic assessment of the likely recovery;
(e) the claimants' insistence on treating the claims as arising from one homogenous group rather than treating them as separate and very different claims; and
(f) the abandonment of the negligence allegations at the pre-trial review in October 2010 and the pursuit thereafter of the general damages claim based on nuisance alone.
(a) the unrealistic approach adopted by the claimants to the law, specifically the permit;
(b) the advancing of wholly unarguable factual claims for the vast majority of the lead claimants as a result of the uncritical approach adopted for the merits of the individual claims;
(c) the refusal to engage with the question of threshold;
(d) the refusal of the sensible commercial offers made in December 2009 and repeated in November 2010;
(e) the unreasonable Part 36 offers made by the claimants themselves;
(f) the conduct and abandonment of the negligence case; and
(g) the unrealistic approach taken by the claimants throughout to the value of the claims.