England and Wales High Court (Technology and Construction Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT

		Royal Courts of Justice Rolls Building, 7 Rolls Buildings London EC4A 1NL
		15 November 2013

Mr. Justice Edwards-Stuart:

Introduction and summary

1. This judgment concerns the costs of an application by the Claimants to instruct a fresh expert, a Mr. Edwards, and to amend the Particulars of Claim.
2. I allowed some of the amendments during the course of the hearing and then reserved judgment on all the other matters. The judgment was handed down on 24 October 2013, and this judgment should be read in conjunction with it.
3. Following the handing down of the judgment I gave the parties permission to put in written submissions in relation to costs. Submissions were duly put in by Mr. Bob Moxon-Browne QC, for the Claimants, instructed by Berrymans Lace Mawer ("BLM"), Ms. Fiona Sinclair QC for the First Defendants ("Galliford"), instructed by RPC, and Mr. Samuel Townend for the Second Defendants ("the architects"), instructed by Dentons.
4. For the reasons which I briefly set out below my overall conclusions in relation to costs are as follows:

i) The Defendants should pay the costs of the application to call Mr. Edwards.

ii) The claimant's costs of instructing Mr. Streeter (the former expert) should not be recoverable.

iii) There is to be no special order in relation to the Defendant's costs of dealing with the evidence of Mr. Streeter.

iv) The costs thrown away or occasioned by the black and blue amendments are to be the Defendants' costs in any event. The costs of the application to make the green amendments are less straightforward, since these should have been resolved in correspondence.

v) The Claimants should have 50% of their costs of the application in respect of the red amendments. However, all other costs occasioned by the red amendments should be the Defendants in any event.

5. However, the actual order that I propose to make in respect of costs will not mirror exactly the conclusions that I have summarised above, because I intend to make an order that will cause the minimum amount of costs to be expended in assessing the relevant costs.

My conclusions on the conduct of the parties in relation to the applications

6. The fire occurred some nine years ago and the design and construction of the building took place in about 2001/2002. The claim has not been pursued with vigour. In these circumstances the Claimants have only themselves to blame for the fact that they found themselves making an application to amend the Particulars of Claim after the relevant limitation periods had arguably expired.
7. However, for the reasons set out in the principal judgment, I consider that the Defendants' response to the applications overall was in part ill-judged and was generally over-aggressive.
8. In resisting the applications the Defendants incurred what were, in my view, disproportionate costs. This had the effect of causing the Claimants to incur disproportionate costs also in making the applications. I consider that in this the Defendants were in breach of the overriding objective (in its post-1 April 2013 form).
9. The applications to amend the Particulars of Claim were in part made necessary by the manner in which the claim had been pleaded in the first place. It was in my view a mistake to rely on the same breaches of duty against both a contractor and an architect. This is because it is generally inappropriate to rely on the same breaches of duty against a party who is under an obligation to achieve a particular standard or result and against another party who is under an obligation to exercise reasonable care. In order to remedy this, during the course of the hearing I directed the Claimants to plead the breaches of duty separately against both Galliford and the architects.
10. The Claimants would have assisted their position on the application for permission to instruct Mr. Edwards if they had obtained a witness statement from Mr. Streeter explaining the reasons why he no longer wished to act as an expert or, alternatively, a witness statement containing a clear explanation of those reasons and when he reached them. The absence of any such witness statement merely fuelled the Defendants' enthusiasm for opposing the applications.
11. The black/blue amendments largely involved matters of refinement or clarification of the Claimants' case and were largely uncontroversial (subject to costs). As to the green amendments, once the Claimants had made their position about the purpose of the amendments clear during the argument at the hearing, most of the opposition to the amendments fell away. However, the need for the application was in large measure brought about by the Defendants' failure to answer BLM's letter of 16 August 2013 in which they explained the purpose of those amendments.
12. The red amendments were opposed root and branch. This stance was partly justified because I did not allow the amendments in full (or modified them, in the case of the architects). In particular, I did not give the Claimants permission to rely on material produced by the insurance industry in relation to fire precautions in commercial buildings.
13. I found that the Defendants' allegations in relation to "expert shopping" were substantially without merit. However, I did direct the Claimants to disclose any other reports produced by Mr. Streeter after his first report of April 2005 (which had already been disclosed).
14. There was a faint suggestion that these applications could have been dealt with, wholly or in part, at the first CMC. I do not regard this as realistic, given the attitude of the Defendants.

The appropriate order for costs

15. I propose to make an order that is as simple as possible to implement and which will not give rise to unnecessary and time-consuming analysis of the parties' costs. Nevertheless, it is intended to reflect my findings and conclusions as set out above.
16. The order is therefore to be as follows:

i) The Defendants are to pay 50% of the Claimants' costs of the applications (including the costs of the hearing of 9 October 2013). Such costs are to be paid by the Defendants in equal shares (but on a joint and several basis).

ii) The Claimants' costs of instructing Mr. Streeter are not to be recoverable as costs of the action, and this includes the cost of complying with the order in relation to the disclosure of any other reports. The costs incurred by the Defendants in dealing with the report or reports of Mr. Streeter are to be costs in the case.

iii) For the avoidance of doubt, the costs of incurring and dealing with the report of Mr. Edwards (both historic - save for the costs of the initial instructions to him and the costs incurred thereafter in setting up a "Chinese wall" in Mr. Edwards's firm, which are to be borne by the Claimants in any event - and going forward) are to be treated as costs of the action in the ordinary way.

iv) For the avoidance of doubt, the Claimants' costs of making the amendments (which are not to be treated as falling within paragraph (i) above) are to be borne by the Claimants in any event.

v) Subject to paragraphs (ii) and (iii) above, the Defendants' costs incurred, thrown away or occasioned by the amendments are to be paid by the Claimants in any event.

17. In addition, the Defendants are to pay the Claimants £10,000 by way of interim payment on account of their costs of the applications. That sum is to be paid within 14 days of the date of handing down this judgment.
18. If there is anything about this order which is unclear, any party is at liberty to raise them in writing if agreement cannot be reached with the other parties. Otherwise, the Claimant is to draw up an order, to be agreed with the Defendants, and submit the draft for my approval no later than three working days after the hand-down of this judgment.