Date  Headline

  • 30.06.2011
    The Owners and/or Bareboat Charterers and/or Sub-Bareboat Charterers of the Ship Samco Europe v The Owners or Charterers of the Ship MSC Prestige [2011] EWHC 1656 (Admlty)
    • Key areas: Part 36; Part 61; withdrawn offer; High Court

      This was a Hearing regarding costs in relation to the main action.

      The Claimant made a Part 36 and Part 61 offer to settle liability on a 60%:40% basis on 9th September 2009 in the Claimant’s favour.  Expert evidence and witness statements were subsequently changed.  The liability offer was withdrawn on 4th February 2011, two months before trial, with a further offer being made on a 2/3:1/3 in the Claimant’s favour.

      At trial liability was determined on a 60%:40% basis in the Claimant’s favour, thereby matching their original, withdrawn offer.

      The Claimant applied for their costs to be paid in the same proportion until 1st October 2009 with their costs thereafter being paid in full.  The Defendant submitted that because the offer was withdrawn the whole of the costs should reflect the Parties’ liability.

      Both Parties relied on conflicting Court of Appeal decisions, with the Claimant relying on the later decision which did not refer to the earlier one.

      CPR Part 61 does not refer to offers being withdrawn.  However, the Court held that what should be determined is whether it would be unjust not to award the offeror their costs.

      It was also held that the Court should look at what caused the post-offer costs to be incurred.  On the facts, the Court held that the costs were due to the Defendant’s own actions by not accepting the original offer which had been available for over 16 months.

      The Court held, therefore, held that the Claimant would be allowed all of their costs from 1st October 2009, with the Parties’ respective costs before being allowed on a 60%:40% basis.

  • 30.06.2011
    N v N (Costs) [2011] EWCA Civ 979
    • Key areas: Part 36 offer; costs of appeal; Court of Appeal

      The Appellant in the main action was successful in a divorce case.

      The Court then dealt with costs.

      The Appellant disclosed correspondence relating to offers he made and were rejected. The first as a Calderbank letter, the second was stated as being a Part 36 offer.

      However, the Court noted that the Part 36 offer stated the following:

      “This offer is intended to have the consequences of Part 36. If the offer is accepted by 4pm 23 June 2011 you will be liable for all of our costs in accordance with Rule 36.10 of the Civil Procedure Rules.”

      The Court noted that the effect was for the offeree to pay the offeror’s costs, and so invalidated it.  The Court held that neither offer letter was to be relied upon: the first because it was overridden by the second, which in itself, was not a valid offer.

      Given the facts of the case, in particular the interests of the Parties’ children, and because the costs decision at first instance was for there to be no order, the Court held that there would be no order to costs on the Appeal.

  • 30.06.2011
    KAR Oil Refining Ltd. & Anor v Frion Ltd. & Ors [2011] EWHC 1813 (Ch)
    • Key areas: basis of assessment; Indemnity Basis; party’s conduct; High Court

      The Claimants in this action applied for default judgment against the Seventh Defendant (a Mr. Gibbins) under CPR 12.3 and CPR 12.4(2).

      The Court had previously allowed the Claimants alternative service of the Claim Form and Particulars of Claim in relation to a claim for deceit, conspiracy and fraudulent misrepresentation and was satisfied that they had been served and the Seventh Defendant was out of time for serving an Acknowledgment of Service.

      The Court held that it was satisfied that the claims detailed in the Particulars would be proven at trial and that the Seventh Defendant would be liable to the Claimants for $10 million.

      The Court also stated that due to the nature of the claim and because of the Seventh Defendant refusing to respond at all, the Claimants were entitled to Indemnity Costs in relation to the Application, with an interim payment of £50,000.00.

  • 29.06.2011
    Motto & Ors v Trafigura Ltd. & Trafigura Beheer BV [2011] EWHC 90206 (Costs)
    • Key areas: CFAs; interest on costs; SCCO

      This was an Application by the Claimant over a preliminary issue, which was supplementary to a previous preliminary hearing.

      The Claimants funded the matter via CFAs, and the Application was to determine the date from which interest was to run: from the date of judgment or the date of the final costs certificate.

      The Claimants submitted that there was an implied term in the CFA that interest would be retained by the Solicitors and Counsel.  The Defendants submitted that s. 17 Judgments Act 1838 was amended by the CPR and so the existing caselaw over interest (Hunt v Douglas Roofing Ltd. [1990] 1 AC 398 and Thomas v Bunn [1991] AC 362) no longer applied.  The Defendants relied on the recent County Court decisions on Gray v Toner and Bridle v Ikhlas.  However, the Claimant noted that there was nothing in the Act, nor in the preparatory materials which mentioned any such overruling.

      The Claimants referred to CPR 44.12(2) and Costs PD 4.2(6) in support of the submission that interest ran from the date of the Judgment.  The Defendants stated that CPR 44.12(2) was an exception to the general rule under CPR 40.8.

      The Court held that the Hunt and Thomas cases remained good law, but the Courts now have the power to make other orders regarding interest due to CPR 40.8(1)(b).  It also held that it could not imply a term into the CFAs that interest belonged to the Solicitors or Counsel, and so belongs to the Claimants.

      However, in the circumstances, it was held that interest runs from the date of the costs certificate.

  • 29.06.2011
    Willow House Domiciliary Care Agency Ltd. and Wilson v Care Quality Commission [2011] UKFTT 359 (HESC)
    • Key areas: “unreasonable conduct”; First-Tier Tribunal (Health, Education & Social Care Chamber);

      This was an Appeal against the Respondent’s refusal to register the First Appellant as a registered care provider, of whom the Second Appellant was a manager.

      During the proceedings, the First Appellant was dissolved due to their accounts not being filed at Companies House.  This led to the Appeal proceedings being stayed until the matter was resolved.  The Appellants had also accepted that they did not meet the necessary requirements at this moment in time, but hoped to do so in the future, and the appeal should be allowed.

      The Appeal was, however, dismissed.

      The Respondent then claimed their costs under r. 10 The Tribunal Procedure (First-Tier Tribunal) (Health, Education and Social Care Chamber) Rules 2008 which states that costs may be awarded if the Tribunal considers that a party had acted “unreasonably in bringing, defending or conducting proceedings”.

      The Tribunal held that in the circumstances, r. 10 applied and costs were ordered at £7,428.00.

  • 29.06.2011
    Medway PCT & Anor v Marcus [2011] EWCA Civ 750
    • Key areas: Part 36; both parties win some issues; Court of Appeal

      This was an appeal over an award for costs arising from a claim for clinical negligence.

      The Claimant had suffered from embolisms in his lower left leg.  These were not diagnosed and ultimately resulted in an amputation.  He claimed that had the problem been diagnosed sooner, the leg would not have required an amputation.  Liability was only admitted 2 days before trial, and causation was denied throughout.

      The Claimant claimed £731,255 yet at trial was only awarded £2,000.00, and so only obtained 0.25% of his claim.  However, at first instance he was awarded 50% of his costs.

      The Defendants appealed the costs award.

      Neither Defendant made a Part 36 offer and at first instance the Court was scathing of their conduct in this manner, stating that the appellants “could not sensibly complain that an order for costs against them was unjust”.

      However, on appeal, the President of the Queen’s Bench Division held that because a Part 36 offer would have led to a possible costs payment of £100,000.00, it was not unreasonable for the Defendants not to make a Part 36 offer.

      The Court held that given that the Defendants won on causation, thereby defeating almost the whole claim; that liability was only admitted just before trial; and that the award of £2,000.00 was an apparent attempt to salvage some damages, they would be entitled to 75% of their costs.

      Jackson LJ took the opposite view.  He stated that a Part 36 offer would not have led to a costs award of £100,000.00 because the costs would have been assessed on the Standard Basis.  He took the view that given the Claimant had won damages, the starting point should be that the Claimant is entitled to costs, albeit subject to a possible reduction.  He also stated that he position on causation was significantly altered by the Defendants deciding, shortly before trial, to no longer rely on the evidence of one of their experts, which is why the claim failed.  He held that the appeal should be dismissed.

      Tomlinson LJ agreed with the President and so the Appeal was allowed on a 2-1 basis.

  • 28.06.2011
    Sufi & Elmi v UK – 8319/07 & 11449/07 [2011] ECHR 1045
    • Key areas: ECtHR; Human Rights

      The UK lost a case in the European Court of Human Rights over breaches of art. 3 European Convention on Human Rights over attempts to remove people to Somalia.

      Costs were claimed at £14,539.99 and £4,074.44 respectively, but the Court held that they were submitted out-of-time.  .  A further claim of £4,545.00 was made in relation to further submissions the Parties made.

      In both cases, the UK submitted that the first claim was excessive.

      However, the Court used its discretion to allow the claims and awarded €14,500.00 and €7,500.00 (approx. £12,900.00 and £6,675.00).

  • 28.06.2011
    KT & ST (Minors) v Bruce [2011] EWHC B14 (QB)
    • Key areas: Part 36 offer; minors; High Court

      The Claimant in this case accepted the Defendant’s pre-issue offer made under Part 36.

      The issue was that because the Claimants were minors they needed the Court’s permission to finalise the offer and the time for accepting the offer had expired.  The parties also argued over costs.

      The claim was for clinical negligence resulting from the death of their mother from breast cancer, due to a late diagnosis.

      Medical evidence was obtained and a letter of claim was sent.  The Defendant responding admitting liability but were unable to provide a decision on causation, but they hoped to provide one within 3 months.

      One week before limitation was due to expire, the Claimants sent a chasing letter suggesting that the parties agreed to extend the limitation period, which was agreed.

      A formal letter of response was served 14 months after the letter of claim. It denied breach of duty, but accepted causation should breach be proven.

      The Part 36 offer was made on the same day.

      The Claimant stated that the offer could not be considered due to a lack of evidence.

      After obtaining further evidence, the offer was accepted, 5 months after it was made, on the basis that costs would be paid up to the date of the infant approval hearing.

      The Defendant responded stating that the Part 36 offer had not been accepted and provided details of their costs since it expired.

      The Claimant submitted that there were delays by the Defendant and due to the amount of type of expert evidence required, there were valid reasons for not accepting the Defendant’s offer at that time.  They also emphasised that at no time did the Defendant state that they would rely on the Part 36 offer to justify their own costs and that it was unreasonable for them to rely on it given their own delays in the initial response.

      The Defendants submitted that there was no reason for the Court not allowing them their costs and that they were perfectly entitled to make an offer under Part 36.

      The Court held that CPR 36.10 applies where both the offer and acceptance occur pre-issue.  It also held that it would have been “difficult, if not impossible” for the Claimant to consider the offer within 21 days.  The Court noted that due to the delays in the Defendant’s formal response, further evidence would have had to be obtained before the offer could be considered and that there was no suggestion that the Part 36 offer would be made at the same time as the formal response, which given the friendly dealings between the Parties, the Defendants should have done.

      On the facts, the Court held that the Claimants were entitled to their costs and that the Defendants would not be entitled to theirs.

  • 28.06.2011
    Harris v The Solicitors Regulation Authority [2011] EWHC 2173 (Admin)
    • Key areas: summary assessment; High Court

      This was an appeal against a decision of the Solicitors Disciplinary Tribunal.

      The Appellant had admitted numerous breaches of the Solicitors Introduction and Referral Code 1990; Solicitors Code of Conduct 2007 and Solicitors Accounts Rules 1998 in relation to referral fees; provision of costs information to clients; misuse of clients’ funds; provision of accounts information,. Had had also been found guilty in relation to the provision of facts to lenders in mortgage transactions; and over conflicts of interest in relation to Wills.

      The Tribunal held that the overall effect was that the Solicitor had had a “cavalier disregard for the Professional Rules”.

      The Appellant appealed against the Tribunals findings on the grounds of errors of law; however, all grounds were dismissed and the sentences were upheld.

      The Court ordered that the Respondent’s costs were to be paid by the Appellant.  The Court stated that it would ordinarily make an order for summary assessment, but due to the Appellant being unwell it was considered appropriate in the circumstances, due to Counsel being unbriefed on this issue as a result.

  • 27.06.2011
    Shah v Elliot [2011] EW Misc 8
    • Key areas: Part 36; time-limited offer RTA; County Court

      This was an appeal by the Defendant over an order for costs made in an assessment of damages hearing.

      The main action was a rear-end-shunt RTA in which liability was admitted and at trial the Claimant failed to beat the Defendant’s offer.

      The appeal was to determine whether the offer was valid under Part 36; if not whether it should be taken into account and whether the Judge should have taken it into account when determining costs.

      In the main action, the Claimant made a Part 36 offer of £4,273.00 and the Defendant made a Part 36 offer of £3,523.00 plus “predictive costs” which was open for 21 days.  After judgment had been entered on liability, The Claimant subsequently made a further Part 36 offer of £3,723.00.  At trial, damages were assessed at £3,441.81.

      The Court held that because the Defendant’s letter was headed as “Part 36 offer” it was valid under Part 36, applying C v D ([2011] EWCA Civ 646).

      The Claimant also submitted that the Defendant’s letter did not state that it was intended to have the effect of Part 36 and the reference to “predictive costs” meant that the offer was incompatible with Part 36.  The Court agreed with this submission, and so the Defendant’s offer was not a valid Part 36 offer.

      The Court also held that the Judge was wrong to completely ignore the offer even though it was not a Part 36 offer.

      The Court ordered that the Parties were to bear their own costs of the appeal and the costs of the main action were assessed at £3,509.62.

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