Jersey Unreported Judgments

Accident claim - reasons for ordering an interim payment in favour of the plaintiff and for the decision in respect of costs.

[2018]JRC088A

Royal Court

(Samedi)

16 May 2018

Before     :		Advocate Matthew John Thompson, Master of the Royal Court
Between	Zac (A Minor) through his Guardian ad Litem		Plaintiff
And	The Estate of A (Deceased)		Defendant

Advocate D. J. Benest for the Plaintiff.

Advocate L. A. Ingram for the Defendant.

CONTENTS OF THE JUDGMENT

		Paras
1.	Introduction	1
2.	Background and procedural history	2-20
3.	The interim payment and stay applications	21-45
4.	Decision	46-68
5.	A payment on account of costs	69-86
6.	Decision	87-101

judgment

the MASTER:

Introduction

1.        This judgment contains my reasons firstly for ordering an interim payment in favour of the plaintiff pursuant to Part 8 of the Royal Court Rules 2004, as amended (the "Rules") and a stay of determination of part of the plaintiff's claim.  Secondly, this judgment contains my decision in respect of the plaintiff's application for a payment on account of costs.

Background and procedural history

2.        The plaintiff's claim is for damages for personal injury arising out of a road traffic accident which took place in August 2010.  As a result of his accident the plaintiff sustained a very severe brain injury.  This is agreed by the neuropsychology experts retained on behalf of both parties as recorded in their joint statement dated 5^th March, 2017.

3.        Proceedings were issued by the plaintiff through his guardian ad litem by an order of justice dated 20^th January, 2015, with an answer being filed on 24^th February, 2015.  The defendant's answer admitted liability.  This admission of liability followed an earlier admission of liability by the defendant's insurers in July 2011.  The dispute is therefore about the quantum of damages due to the plaintiff as a result of the defendant's admitted breach of duty.

4.        Directions were first given in June 2015 relating to discovery, witness statements of fact and expert evidence from various medical experts.  These were directions were subsequently varied by an Act of Court dated 6^th October, 2015.

5.        On 22^nd April, 2016, the plaintiff applied to the Royal Court for a payment on account and a stay for a period of 2 years to allow the plaintiff's condition to settle and the plaintiff to undergo an intensive rehabilitation independent living programme.

6.        The application came before the Royal Court because in 2016 only the Royal Court had the power to order interim payments.  Since 1^st June, 2018, an interim payment under Part 8 of the Rules may now also be ordered by the Judicial Greffier and therefore by the Master of the Royal Court.

7.        The Royal Court made no order for an interim payment for a rehabilitation programme but gave leave for the plaintiff to make a further application at a later date.   As a consequence, the stay application fell away.  The Royal Court did order a payment on account of the plaintiff's costs.

8.        On 26^th July, 2016 further directions were agreed relating to the filing of expert evidence for various medical experts and for meetings of experts.  This timetable was slightly varied by an Act of Court dated 1^st December, 2016, including granting a stay to enable the parties to meet for the purposes of mediation.

9.        Following mediation, the matter was further stayed until determination of an application by the plaintiff's curator to the Royal Court whether or not to enter into a settlement agreement with the defendant.

10.      The curator's application was first heard by the Royal Court in 19^th July, 2017 was adjourned until 27^th November, 2017, and further postponed to 23^rd January, 2018, when the curator was directed not to compromise the present proceedings.

11.      On 23^rd January, 2018, the matter came back before me for further directions.  At this hearing it was clear that the plaintiff was going to make a further application for an interim payment as permitted by the Royal Court's Act of Court of 22^nd April, 2016.  Accordingly, directions were given for the filing of evidence in relation to the further interim payment application.  At the same time the plaintiff issued a summons seeking a payment on account of costs.

12.      After the Royal Court hearing in April 2016, the plaintiff filed evidence in respect of care and case management from a Mrs Eaton and speech and language therapy from a Mrs Coombes.  The plaintiff had already filed its expert evidence from its neuropsychologist before the April 2016 hearing.

13.      The defendant at the end of 2016 filed experts' reports from a neuropsychologist, Dr Connolly, a care and case management expert, Ms Fiona Johnson and a speech and language therapist expert, Ms Katie Price.

14.      Joint meetings of experts in the field of neuropsychology, speech and language therapy and care and case management took place in March 2017.

15.      On 21^st April, 2017 the plaintiff provided a detailed calculation of its loss.  Although initially this was on a without prejudice basis, subsequently the plaintiff relied on this schedule of loss on an open basis.

16.      As a result of the exchange of evidence and the provision of the plaintiff's schedule of loss, by the time of the application before me there were two main areas of dispute.

17.      The first concerned what discount rate should be applied to the plaintiff's claim for earnings related loss.  The plaintiff argues for a discount rate of minus 3.75% for earnings related losses based on the report of his actuary and a figure of minus 2.25% for non-earnings related losses.  In contrast to this evidence, the current discount rate applied by the Royal Court in Saint v Le Feuvre [2014] JRC 142D is minus 0.75% because the Royal Court held in Saint v Le Feuvre (without any real enthusiasm) that it should follow the Royal Court's previous practice i.e. to use the discount rate prevailing in England unless until the issue was revisited before the Royal Court with the benefit of expert evidence.  The current discount rate in England is minus 0.75%. 

18.      Applying the current UK rate, the plaintiff would only recover 25% of the damages claimed using the discount rates argued for by its actuary as referred to above.  At the time of Saint v Le Feuvre the discount rate was plus 2.5% which would have reduced the plaintiff's claim further.  The current UK discount rate is also under review by the Ministry of Justice.  A rate of 0.5% would mean that the plaintiff would only recover around 16.5% of the amount claimed using the discount rates argued for; a discount rate of 1% would lead to the plaintiff recovering less than 15%.  These are significant differences.

19.      The other main area of dispute between the parties concerns the level of care required by the plaintiff for the rest of his life.  Partly this is affected by the discount rate argument referred to above.  However, there is also major disagreement between the experts retained by the parties in relation to the level of support required.  In summary the defendant argues that the plaintiff will be able to work and live independently and therefore needs much less care than is argued for by the plaintiff.

20.      While the above are the two main issues between the parties, there are other areas of disagreement between the experts.  However, these are relatively minor by comparison and in my judgment will have much less financial impact than the two main areas of dispute.

The interim payment and stay applications

21.      The first summons issued by the plaintiff sought an interim payment.  This was said on the face of the summons to be "in order to fund a one year rehabilitation independent living programme".  The summons also sought a stay for one year for the duration of the rehabilitation independent living programme.

22.      The application was supported by an affidavit from the plaintiff's curator which set out the costs of the one year rehabilitation independent living programme.  That was made up of the following elements:-

(i)        Accommodation;

(ii)       Furnishing and household items;

(iii)      Groceries/living expenses;

(iv)      Support worker costs;

(v)       Holidays;

(vi)      Rehabilitation therapy;

(vii)     Case management costs;

(viii)    Monthly case management costs.

23.      How these figures were arrived at was set out in a letter dated 5^th February, 2018, from Verity Boak of Community Case Management Services Limited who acts as case manager for the plaintiff.  In her second witness statement, Ms Boak also explained the support the plaintiff had received from a support worker and what had occurred between June 2016 and December 2016 when such support had not been provided due to lack of funding.  The plaintiff's application also contained three letters from Dr Richard Maddicks dated 25^th April, 4^th July and 24^th July, 2017 in relation to the plaintiff.  Dr Maddicks in particular in his letter of 4^th July, 2017 referred to a separate letter concerning the liability of an independent living trial.  On my request a copy of this letter also dated 4^th July, 2017 was provided to me.  This letter described that some of the difficulties the plaintiff faced while living at home and stated that an adequately supported independent living trial would offer a greater opportunity to assess the care required for the next stage of the plaintiff's life.

24.      The defendant in opposition to the application for an interim payment filed an affidavit from Mr Chris Hill, Claims Manager of the defendant's insurers, attaching a letter from Ms Fiona Johnson dated 15^th March, 2018 and a supplementary report from Dr Connolly, the defendant's consultant neuropsychologist dated 16^th March, 2018.  This letter and report were provided in response to the evidence filed by the plaintiff through his curator albeit not the letter of 4^th July, 2017; this letter was only produced following a request I made.  In summary both reports expressed concern about the level of care and support asked for as part of the independent living programme.

25.      Ultimately the interim payment was sought because it was hoped that an independent living trial would enable the Royal Court to come to a clear view on the plaintiff's future to enable to decide the amount of damages to be paid.  The plaintiff is at a stage where he has reached adulthood, and so an assessment was needed to review how far he could live independently and what support he might need.

26.      Advocate Benest contended that taking into account the interim payments made to date the amount asked for reflected a relatively low percentage of the damages claimed for the plaintiff.  Even if a discount rate of 1% was applied, the plaintiff was only asking for a relatively small percentage of any damages that might be awarded.  The outcome of the enquiry would determine whether or not the plaintiff could live independently or semi-independently and therefore what level of care was ultimately required.

27.      The plaintiff's primary submission was that the amount sought was proportionate to the substantial damages which would be awarded at trial even on the most cautious view.

28.      How any interim payment was used was a matter for the curator.  The decision to award an interim payment was not a sanction permitting the curator to use funds in a particular way.  It was not therefore for the court on an application for an interim payment to be concerned as to how monies were going to be used. 

29.      The only question was whether there was a risk of the total amount of interim payments made on account of damages exceeding any damages that were likely to be awarded at trial.  The court simply had to be satisfied that the amount of the interim payment sought did not exceed "a reasonable proportion of the damages which in the opinion of the court are likely to be recovered by the plaintiff" by reference to Rule 8/2 of the Rules.  The jurisdiction to make such an order was satisfied because liability had been admitted and therefore the threshold in Rule 8/2(1)(a) was met.

30.      The defendant's protection was found in Rule 8/8 of the Rules because if too great an interim payment had been awarded then the court had the power to require any overpayment to be repaid.

31.      In this case there were no payments into court or Calderbank offers which would otherwise be relevant as to whether or not to order an interim payment.

32.      In relation to the question of whether or not there should be regular reports, Advocate Benest accepted that the team treating the plaintiff would provide reports to the curator in any event and such reports would be discoverable.

33.      In relation to the application for a stay, this was linked to why an independent living trial was needed.  The need for such a report was agreed by the neuropsychologists' consultants in their joint report, in particular at paragraphs 5.3, 5.4, and 6.3.

34.      The plaintiff as much as the defendant wanted to see the case at an end but without a stay and the results of an independent living enquiry, the court was not in a position to do justice between the parties.

35.      Advocate Benest accepted there was a significant issue in respect of the discount rate, but he hoped this would be resolved because of another significant case due to come before the Royal Court in the summer of 2018 which would deal with this issue.  He therefore suggested that any directions in relation to the discount rate argument should await the outcome of that other case.

36.      Advocate Ingram's contentions, while accepting that the question the ordering of an interim payment and a stay were linked, focused on whether or not the Royal Court should order a stay.

37.      He submitted that the court had no power to grant a stay and therefore could not order an interim payment on account of damages for an independent living programme.

38.      To the extent the court had a discretion to order a stay, he emphasised the importance of these proceedings reaching a conclusion.  In this case if there was power to grant a stay, it should be refused because the application was no more than repetition of the material placed before the Royal Court in April, 2016.  There should be finality which requirement was supported by the overriding objective.

39.      The defendant was also critical of the costs being incurred because the amount sought to fund a support worker for 10 hours per day for a year of the trial meant there would not be an independent living trial because there would be no reduction of support to the plaintiff to enable the plaintiff to live independently.

40.      The need for finality was also important because of the significant costs that had been incurred since the previous application for an interim payment to the Royal Court.  There had been no real progress made despite the extensive costs incurred by the plaintiff since April 2016.

41.      If a stay was ordered, what was being looked at was a trial in 2020 some ten years after the accident.  Such an approach was not consistent with the overriding objective.

42.      There was also no evidence that a stay for 12 months was needed and this period had not been justified.  The position should be clear after 6 months.

43.      He also complained that the defendant had at times been kept in the dark as to the plaintiff's approach.  If an interim payment was ordered then the defendant sought regular reports every 4 to 6 weeks together with all relevant material.  This was because only some of the material relevant to the payment application had only been disclosed the day before the hearing enabled the defendant to understand the current condition of the plaintiff.

44.      In relation to the discount rate and the question of whether or not the matter should be stayed, it was not clear that the other Royal Court case would determine matters because of the risk of appeals, because the other case might settle and because each case was different on its own facts.  Finally, the other case would not be binding.

45.      In relation to the amount of damages that might be awarded, there were also challenges to other more detailed heads of loss claimed.  However, he accepted that to proceed on an assumption that the plaintiff would recover at least 50% of the damages claimed applying a 1% discount rate was not unfair.

Decision

46.      The starting point for a decision whether or not to order an interim payment is the power to order interim payment contained in Rule 8.  In Rule 8/2, to apply for an interim payment the court has to be satisfied that one of three criteria are met.  In this case the first criteria is met because the defendant has admitted liability.

47.      What the court then has to consider is whether or not to order an interim payment.  The court appears to have a discretion both as to whether to order interim payment at all and, if it decides to exercise that discretion, any amount ordered must not exceed a reasonable proportion of the damages likely to be recovered by a plaintiff.  J v G Limited [2005] JLR 338 at paragraph 15 described an interim payment as follows:-

"It is intended as an advance on damages to which he will become entitled in due course; it is not intended as a procedure for giving him interim damages when he may well fail at trial."

48.      I therefore agree with Advocate Benest in light of the above description that, in deciding whether or not make an interim payment, it is not necessary for me to look at how the plaintiff might make use of any interim payment awarded.  In this action, how funds received for the plaintiff are used is a matter for the curator who is ultimately accountable for his actions.  Although in the course of argument I made certain observations about the amount the curator intends to spend in particular in relation to why a two-bedroom flat was required, whether payments should be made weekly rather than monthly as well as in relation to the level of care support, these are matters for the curator and are not matters ultimately to be taken into account in relation to a decision whether or not to order an interim payment.

49.      Taking the cautious view described above and accepted by Advocate Ingram, and taking into account previous interim payments previously made, the level of interim payment asked for was no more than 30% of the damages that on any view to be awarded at trial.  On this basis there is no valid reason to refuse the interim payment.

50.      The above approach is also consistent with the guidance set out in Volume 2 of Civil Procedure 2018 Edition at paragraph 15-111.  In particular, a plaintiff does not have to demonstrate that a sum is required to cover a particular need.  As discussed at paragraph 15-117 the court should not fall into the trap of being concerned about the desirability of the expenditure to be met out of the proposed interim payment (see Strangman v McArdle [1994] 1 Weekly Law Reports 1653.) 

51.      I was also not persuaded that the application was simply a reformulation of the application made in April 2016.  Had it been, it could have been rejected as an abuse of process.  However evidence involving both parties also emerged after the previous application for an interim payment before the Bailiff.  In particular both parties' neuropsychologists in their joint statement produced in March 2017 agreed that the plaintiff needed a rehabilitation programme which would lead to a more accurate final prognosis (see paragraphs 5.3, 5.4 and 6.3 of their joint report).  In respect of the care experts both recognised that some support was needed by the plaintiff.  Where disagreement arose between Mrs Eaton for the plaintiff and Ms Johnson for the defendant was on the level of support required.  In my judgment the independent living enquiry will provide evidence to enable the Royal Court to resolve these differences of opinion. 

52.      However, while I decided to order an interim payment for the above reasons, it did not automatically follow that the entirety of the proceedings should then be stayed. 

53.      This was firstly because, by reference to the overriding objective, the obligation on the Royal Court, including the Master as civil procedure judge, is to deal with cases justly and at proportionate cost.  In particular the court must actively manage cases including deciding cases promptly; in other words the court must endeavour to control the progress of a case to enable a conclusion to be reached.

54.      There must be good therefore reason not to progress a case to trial.  In other words, the starting point for the Master in any case before him should be to set a timetable to enable a case to be determined at a trial unless the court is persuaded that some part of a case should not progress.  That may be because a stay for the purposes of mediation under Rule 6/28 is ordered; it may be because, as has happened in this case, damages cannot be assessed as the prognosis of a plaintiff is unknown.  In other cases, split trials or preliminary issues may be appropriate if the appropriate criteria are met.  Unless one or more of these circumstances applies, however the court will otherwise actively manage a case towards a trial. 

55.      This approach is relevant, in this case as I was not satisfied it was appropriate to stay the entirety of the case.  This was because the issue of a discount rate in view of its effect on the amount of damages that might be awarded was significant and needed resolution.  Determination of the discount rate issue also did not depend on the outcome of any independent living trial.  There is also no overlap between the experts required for a discount rate argument and the experts required for the other issues in dispute.

56.      By contrast it was appropriate, having ordered an interim payment which the plaintiff's curator intended to use to fund an independent living trial, to order a stay of that part of the assessment of damages that required resolution of conflicting medical and related opinions referred to above. Both counsel also agreed if I ordered a stay to enable an independent living trial to take place, the stay should extend to the resolution of all medical or care issues.  Any other approach would lead to increased costs. 

57.      What was also relevant to progress of the discount rate argument however was that a case involving the same counsel appearing in the present case is due to come before the Royal Court in June, when there will be significant argument on the appropriate discount rate for Jersey.

58.      In my judgment this argument will provide greater certainty that exists at present because it will determine at least in 2018 the relevant economic factors applicable to the setting of a discount rate.  How far that can influence other cases will depend on the scope of the decision and whether the factors relied upon in any judgment alter significantly but it is a decision that is likely to be of significant impact and to reduce the scope for argument in other cases.

59.      In relation to the discount rate argument I therefore ordered the parties to name their experts within 1 month but only to produce their expert reports at the end of October 2018 by which time it was hoped that judgment on the discount rate argument being considered by the Royal Court would have been published.  At that stage I would be able to give further directions to enable argument on the discount rate in the present case to take place in advance of a hearing on quantum generally.

60.      This was because the evidence required for such a hearing would be separate from any other evidence required and would be unlikely to lead to duplication.  As the range of possible rates argued for also had such a significant impact as set out above, resolution of this issue also increased the chances of a settlement.

61.      The other aspect of the decision I made in relation to a stay was to impose certain conditions.

62.      Firstly, I wanted to review after 7 months whether the stay should continue.  While the question of how an interim payment was to be spent was not relevant to a decision to order an interim payment, the progress of the independent living programme was of relevance as to whether or not a stay should continue.  If the independent living programme was clearly not going to succeed and this was known after 6 months' then the stay should not continue. 

63.      A review of the stay after 7 months was also appropriate because the reasons why a period of twelve months for the enquiry was required had not been expressly addressed in the material provided to me.  The plaintiff's evidence, while recognising that the level of support care did need to reduce for the trial to succeed, did not address how this was going to happen or over that period.  There was therefore force to the criticisms advanced by the defendant's experts that if the level of care did not start to reduce once an independent trial had been established for some months then there was no point in continuing the stay. 

64.      Secondly, I ordered that the defendant be provided on a quarterly basis with a progress report on the independent living programme by the professionals involved.  This report was to be provided within 28 days of the end of each quarter.  I made this order both so the review I required could take place and because insufficient information had been provided leading up to this application for an interim payment.  It was in particular not satisfactory that Dr Maddicks' letter of 4^th July, 2017 did not emerge until it was requested by me specifically. 

65.      Discovery of a progress report on a quarterly basis also allows both parties to review the effect of the independent living enquiry on the overall claim for damages and therefore to make decisions about whether or not they wish to resolve all or part of the plaintiff's claim.

66.      While the defendant asked for reports every 4 to 6 weeks, I considered this to be too frequent and would lead to the professionals involved with the enquiry constantly producing reports and further cost beyond what is already an expensive exercise.  I was informed that the professionals would review matters each quarter and so this appeared an appropriate period for a report to be produced.

67.      In addition, the independent living trial gives rise to additional discovery being required under the ongoing obligation to produce documents.  The plaintiff was therefore also required within 14 days at the end of each quarter to disclose documents created during that quarter relating to the independent living trial.  I made an express order to this effect, notwithstanding that the discovery obligation exists anyway, again to ensure that the defendant is provided promptly with relevant information about the progress of the enquiry.

68.      Finally, I noted that the independent living trial was without prejudice to the defendant's right to argue at trial whatever arguments it wishes to advance or which may emerge about the level of care proposed for the plaintiff including any legal costs incurred of and incidental to the independent living trial.

A payment on account of costs

69.      The plaintiff's application for a payment on account of costs was made pursuant to Article 2(1) of the Civil Proceedings (Jersey) Law 1956 which states as follows:-

"Power of Royal Court to award costs

(1)     Subject to the provisions of this Part and to rules of court made under the Royal Court (Jersey) Law 1948,[1] the costs of and incidental to all proceedings in the Royal Court shall be in the discretion of the Court, and the Court shall have full power to determine by whom and to what extent the costs are to be paid."

70.      The application was made under Article 2(1) because an application for a payment on account of costs cannot be made under Part 8 of the Royal Court Rules.  This is because of the definition of an interim payment in Part 8:-

"In this Part "interim payment" in relation to a defendant means a payment on account of any damages, debt or other sum (excluding costs) which the defendant may be held liable to pay to or for the benefit of the plaintiff..." [emphasis added]

71.      Advocate Benest argued that the court had an extremely wide statutory discretion conferred by Article 2.

72.      He also referred me to the Bailiff's judgment dated 22^nd April, 2016 (unpublished) where the court ordered a payment on account of costs of £75,000 which exceeded the disbursements incurred by the plaintiff at that time.  The Bailiff stated at paragraph 12 as follows:-

"12.    The next issue which arises is that of an interim award of costs. Both parties agree that I have got jurisdiction to make that order.  The defendant contends I should not make it.  He points to the disparity and the costs which have been apparently incurred on both sides and, on the other hand, Advocate Heywood says it is not fair to the plaintiff or to the plaintiff's lawyers that they should be funding this litigation on the plaintiff's behalf.  They have been retained on a no win no fee basis.  Well there has been an admission of liability.  It seems to be quite obvious that there will be a win to that extent and it will be quite obvious that there will be some costs which will be payable by the defendant to the plaintiff and in the light of that admission of liability and the fact that there will be some award of whatever quantum, I must confess that I am sympathetic towards an award of interim costs because for my part I do not see why the plaintiff's lawyers should have to work for nothing.  I do take the view that there is an access to justice policy issue which is to encourage these claims to be appropriately properly brought in circumstances where there has been an admission of liability.  On the other hand, the amount sought is way beyond what I can conceive as an appropriate figure with which I can be comfortable because I simply do not know the extent to which there may be proper objections to the quantum on the basis that the work was not properly done.  I am not suggesting that it was not properly done, I simply do not know at the moment and in those circumstances I really have regard to what I understand to be the total amount of the plaintiff's disbursements in the order of some £60 to £65,000 and clearly some costs that will flow by way of fees as well.  Having regard to those matters and noting that there has been an interim award already, I am going to order payment of £75,000 on account of costs.  That, as I say, makes no finding as to the ultimate entitlement to costs and that will be a matter of negotiation or if necessary for determination by the Court."

73.      The defendant no longer accepts that the court has jurisdiction to make such an order, contrary to the concession in 2016.  However where an admission of liability had taken place, Advocate Benest argued that Article 2 was wide enough to allow for an interim payment on account of costs.  This was because it was clear on any view that a significant costs order would be made in the plaintiff's favour where there was no payment into court or Calderbank offer.  He accepted that the position was a novel one and any exercise of discretion had to be carried out carefully.

74.      The reason for seeking a payment on account of costs at this stage was that it was not envisaged how long resolution of this case would take when the representatives involved accepted instructions on an "no win, no fee basis".

75.      The policy behind the court having power to make payment on account of costs was to promote access to justice and to promote equality of arms between parties.

76.      The amount sought by way of interim payment on account of costs was £332,000.  The costs and disbursements incurred to date totalled £883,962.70 with interim payments of £110,000 having been made, leaving a balance of £773,962.27.  The disbursements incurred by the plaintiff's English and Jersey lawyers totalled around £140,000.  There were also going to be a significant further of disbursements incurred in relation to experts including in relation to the discount rate argument.  The amount sought therefore was in broad terms 50% of the costs of the English Solicitors and Jersey Counsel incurred to date.

77.      Even if an amount of any interim payment ordered was less than a final costs order in the plaintiff's favour, the defendant was also protected because it could recover any difference out of the damages which were going to be awarded.

78.      The position of Advocate Ingram was that there had to be a costs order before a payment on account of costs could be made.  The Bailiff therefore took an approach which was not correct.  The decision was not appealed on the grounds of economy.

79.      The fact that a costs order was required first was clear from the Court of Appeal's decision in Crociani v Crociani [2014] 1 JLR 503 where the Court of Appeal at paragraph 9 stated as follows:-

"In any event, unless and until the court exercises its discretion under art. 16 to make a costs order there can be no entitlement in the ordinary sense of the word to costs on either basis. The party's "entitlement" is the product of the exercise of the court's discretion; it is not freestanding of it. That exercise is a necessary precondition of such "entitlement.""

80.      The same approach was taken by the Court of Appeal in its recent decision of In the matter of C and D (Matrimonail) [2018] JCA 020 where the Court of Appeal, in carrying out a summary assessment of costs, still based its approach on the premise that a costs order had to be made in a party's favour.  That was why there were no authority in England or Jersey where a court had made had made a payment on account of costs or a summary assessment of costs before it had determined whether or not a party was entitled to costs.

81.      This was also reflected in Rule 12/2 of the Royal Court Rules as stated in Rule 12(2)(3):-

"12/2   Amount of costs recoverable

(3)     Where the Court has ordered a person to pay any costs of a party, it may at any time order that person to pay such amount as it sees fit as an interim payment on account of costs before the costs are assessed."

82.      Any costs in relation to the admission of liability were also likely to be minimal because of liability being admitted at a very early stage.   Such costs were certainly more than covered by the interim payment on account of costs already made totalling £110,000.

83.      The dispute was also not about liability, it was about quantum.  In this case it was not clear who the successful party was going to be.

84.      The court also should not go behind the no win, no fee arrangements agreed between the plaintiff's next friend and the plaintiff's legal advisers. The legal advisers, by entering into such arrangements, had accepted they would not be paid if the claim failed as this was inherent in the nature of no win, no fee arrangements.  Allowing a payment on account of costs before a final determination of who was liable in costs allowed a legal adviser to put this risk to one side.

85.      For the court to have the ability to make such an order required either a statutory or rule change.

86.      In reply Advocate Benest argued that the effect of the Crociani decision was not in any way to fetter the court's power to make a costs order under Article 2 which could not be drawn any more widely.

Decision on a payment on account of costs

87.      I start by reference to the power in Article 2 of the Civil Proceedings (Jersey) Law 1956.  This power is clearly very widely drawn.

88.      Effectively the same language was used in Article 16 of the Court of Appeal (Jersey) Law 1961 which led the Court of Appeal at paragraph 6 of the Crociani case to state as follows:-

"6       The wide discretion which the court enjoys under the first clause of this provision on its face could include a power to make an order for interim costs and is not, in my view, confined, on either a literal or a purposive construction, by the specific powers in the second clause which merely emphasizes and supplements the width of the first."

89.      An argument then took place in Crociani on the effect of Rule 18(1) of the Court of Appeal because the defendant argued that no payment on account could be ordered until a taxation had occurred.  This is the context for the Court Appeal's observations at paragraph 9 of its judgment. The Court of Appeal's ruling was that a taxation was not required before a payment on account was needed.  The Court of Appeal was not therefore being asked to decide whether a costs order in a party's favour was a necessary pre-condition to a payment on account of costs.

90.      The same reasoning was applied in In the matter of C and D (Matrimonail) in relation to the Court of Appeal's power to carry out a summary assessment. The Court of Appeal at paragraph 46 therefore stated:-

"46.    It has already been noted in paragraph 41 above that the absence from the legislation of any express power to make an order for an interim payment on account of costs does not prevent the Court from making such an order.  By parity of reasoning, we consider that an order for a summary assessment of costs is another expression of this Court's "full power" under Article 16 "to determine by whom and to what extent the costs are to be paid".  For the avoidance of doubt, we do not consider that this conclusion is precluded by rule 18 of the Court of Appeal Rules,  which is describing the basis of a party's entitlement to costs (standard or indemnity costs) not the procedural question whether all costs orders necessarily require taxation.  In Crociani, rule 18 was similarly not interpreted as precluding an order for an interim payment on account of costs, and we do not interpret it as precluding an order for summary assessment either.  Nevertheless, as the Court indicated in Crociani, there would be an advantage in having a legislative review of the Rules in order to clarify the process."

91.      The relevance of these decisions to the issue before me is that they both emphasise the breadth of the power in Article 2 of the Civil Proceedings Law and its equivalent in Article 16 of the Court of Appeal Law.  However a final costs order had been made before a payment on account was ordered in Crociani and before a summary assessment took place in In the matter of C and D (Matrimonail). This does not mean however that a final determination on costs has to have been made before a payment on account of costs can be ordered. Article 2 gives the court full power to determine by whom and to what extent the costs are to be paid.  To rule that a payment on account of costs can only be made once the final incidence of liability for costs has been determined in my judgment is too narrow a construction of Article 2 in particular the use of the word "full".  The language of Article 2 could not confer any broader a discretion as was noted in both the Court of Appeal judgments to which I have referred.

92.      However, I am also of the view that such a discretion should be exercised sparingly and only in exceptional circumstances.  At present I cannot envisage of any circumstances where such an order would be made in a case where there were issues of liability and quantum in dispute and which required a trial or before any disputed summary judgment or strike out application had been resolved. Where liability has been admitted, however, such a scenario means it might be appropriate for a discretion to be exercised to order a payment on account of costs notwithstanding that the final amount of damages payable has not been quantified.  Even here caution should be taken and only in exceptional circumstances would such a payment on account of costs be ordered. If the discretion was exercised too flexibly or frequently, this could encourage plaintiffs or their advisers to seek a payment on account of costs rather than trying to reach an overall settlement thus prolonging rather than shortening disputes.  Care must also be taken to ensure that any decision is not unfair on a defendant because the defendant ends up funding the claim against it.

93.      Before deciding whether or not to exercise such a discretion the court, as for interim payments on account of damages, the Court will also want to understand the overall financial impact of its decision if it is persuaded that the case before it is one that might justify a payment on account of cost before the ultimate incidence of liability for costs is decided. This means it will have to form a view on the amount of damages that might be awarded, the amount of costs incurred, what proportion of those costs is asked for, what costs orders might ultimately be made, the issues between the parties and the impact of any relevant payments into court or Calderbank offers.  One or more of these factors may mean that a payment on account of costs is not appropriate. Ultimately, the court would be trying to assess what costs order might be made at a trial and therefore whether it was appropriate to order a payment on account of that likely costs order.  A court facing such an application in personal injury cases would also have to bear in mind the protection awarded to plaintiffs under Part 12A of the Royal Court Rules which generally limits the ability of a defendant to enforce a costs order against a plaintiff beyond the amount of any damages ultimately payable to a plaintiff.

94.      While I consider that a cautious approach needs to be taken to order an interim payment on account of costs before the final assessment of who is to pay what costs, I do not accept that Royal Court Rule 12/2 prevents such an order as a matter of principle.  Rule 12/2 allows the Royal Court to require an interim payment on account of costs where it has ordered a person to bear the costs of any party.  This could be following an interlocutory hearing or after a final determination.  In my judgment however it does not cut down the breadth of the jurisdiction contained in Article 2 itself to prevent the court being able to make an order for an interim payment before the ultimate liability of costs has been determined as a matter of discretion. Rule 12/2 simply sets out a circumstance when a payment on account of costs can be made. The rule does not mean that is the only circumstance when a payment on account of cists can be made. Extremely clear language would be required to construe the rule as in effect cutting down the broad discretion conferred by Article 2. Such language is not present and therefore Rule 12/2 does not operate to bar the plaintiff's application.

95.      In relation to the Bailiff's decision in April 2016, I observe that the Bailiff was cautious in his approach because he did not know to what extent there might be proper objections to the quantum of costs claimed on the basis that work was not properly done.

96.      As matters now stand in this case, the need to be cautious does not just relate to the quantum of cost asked for.  Caution should also be taken to assess what costs order might be made after any trial. In particular, as noted above, there are two significant issues between the parties namely the discount rate argument and the level of care required.  These are the two arguments that have the largest financial impact by far on the amount of damages claimed.  I cannot therefore accept Advocate Benest's suggestion that the plaintiff at trial will necessarily be regarded by the Royal Court as being "the winner" and entitled to a costs order in its favour.  In view of the main areas of dispute, the court may take an issue based approach as a matter of discretion (see Flynn v Reid [2012] 2 JLR 226).  If the defendant prevailed on its arguments in respect of the discount rate or on the level of care required or both, it would be open to the defendant to ask the court to make a costs order in its favour.  This action is not a case about liability when liability was admitted within a year of the accident and where the interim payment on account of costs already made is more than sufficient to cover any costs incurred in relation to dealing with liability; it is a case about how much compensation the plaintiff is to receive.  The outcome of the key matters in dispute is far from clear.

97.      The position is further complicated in this case because the plaintiff's legal advisers have agreed to act on a no win, no fee basis.  Both firms are experienced in personal injuries.  While it was said to me that the case has become more complicated, why it is more complicated than originally in 2011 has not been explained.  In view of the experience of the English and Jersey firms involved, I consider it was always known to them that the plaintiff appeared to have suffered a significant brain injury and there would be complex claims for damages for loss of earnings and for care.  In particular they were aware of the complexity of the case when they entered into fee arrangements with the plaintiff's next friend. Such agreements are also lawyers making an assessment about whether they wish to take a case on when they will only recover costs if they are successful.  To go behind a no win, no fee agreement entered into for a complex case requires some special or unusual feature, not foreseen at the time of the agreement was entered into.  No such feature has been identified in this case.

98.      I am not therefore persuaded in this case that it is appropriate to exercise the discretion in me to make any payment on account of the legal costs of the plaintiff's advisers where the outcome of the case and therefore what costs orders might be made is far from certain and where it has not been explained to me why the circumstances have changed since the plaintiff's advisers entered into no win, no fee agreements.

99.      Where I am sympathetic to the plaintiff is in respect of the costs of experts' reports.  Such reports are necessary to identify issues in dispute and to enable the court to adjudicate on those disputes.  The Bailiff in ordering a payment on account of costs in 2016 effectively met the plaintiff's disbursements at that time.  There have been further reports filed since that time as well as meetings of experts.  Nothing I have read suggests to me that these costs should not have been incurred.  Future expert costs in terms of the discount rate argument and the care argument will also have to be incurred for these issues to be determined at trial.  A payment on account of costs to meet past or future disbursements where liability has been admitted in complex cases does allow access to justice.  In my judgment the importance of presenting effective expert evidence to enable a trial to take place outweighs the risk of an adverse cost order against the plaintiff in this case.  In reaching this view I have taken into account that the plaintiff will recover more than sufficient damages even taking the cautious view referred to above to be able to repay these disbursements if he should be deemed to be the unsuccessful party when the question of costs is ultimately decided.

100.   In this case payments on account of costs of £110,000 have already been made.  The total for disbursements incurred to date is £140,000.  However, I do not know what expert costs might be incurred in respect of the discount rate argument or for a trial of the care and other medical issues to take place.  While therefore I am satisfied as a matter of discretion it is appropriate to make a further interim payment on account of disbursements either incurred or to be incurred, I did not have sufficient information at this stage to quantify such a payment.  I therefore direct the plaintiff within 14 days to set out its anticipated disbursements for experts with the defendant having 14 days to respond.  This will assist me to decide what further payment on account of costs I am prepared to order.

101.   Finally, I wish to stress this is an exceptional jurisdiction even in cases of disbursements which is likely only to be exercised in extremely complex cases.

Authorities

Royal Court Rules 2004. 

Saint v Le Feuvre [2014] JRC 142D.  

J v G Limited [2005] JLR 338. 

Volume 2 of Civil Procedure 2018 Edition. 

Strangman v McArdle [1994] 1 Weekly Law Reports 1653.  

Civil Proceedings (Jersey) Law 1956. 

Crociani v Crociani [2014] 1 JLR 503. 

In the matter of C and D (Matrimonial) [2018] JCA 020. 

Court of Appeal (Jersey) Law 1961. 

Flynn v Reid [2012] 2 JLR 226.