Pg. 01 French v Carter Lemon Camerons LLP

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2 Contents French v Carter Lemon Camerons LLP 1 Excelerate Technology Limited v Cumberbatch and Others 3 Downing v Peterborough and Stamford Hospitals NHS Foundation Trust 5 Yeo v Times Newspapers Limited 7 Contacts and Company Information 9

3 Pg. 01 French v Carter Lemon Camerons LLP French v Carter Lemon Camerons LLP Citation [2015] 2 Costs LO 179 High Court of Justice, Queen s Bench Division, 20 February Background The background to the case is somewhat complex, but in essence the Appellant had appealed against a Detailed Assessment of costs which had been undertaken in 2012 by Master Campbell. The Appeal was subsequently struck out on 2 October 2014, the Appellant filed an Application to set aside the strike out and/or obtain a Relief from Sanctions and on 27 November 2014 the Applications to strike out the Appeal and for relief from sanction were refused. Prior to that Hearing the Appellant had, out of time, filed an Appeal to the Court of Appeal against the Order made on 2 October The Judge had invited the parties to make written submissions in respect of the costs of the Hearing on 27 November Details The Court noted that the total value of the Costs Orders made against the Appellant up to and including 2 October 2014 (including the Detailed Assessment) amounted to 218, The Court further noted that the Appellant had made no payment on account of that sum and that the reason the Costs Appeal had been struck out was because of the Appellant s failure to comply with an Order, requiring her to file an Affidavit of Means to enable the Judge to determine the Respondent s Application for security for costs and for part payment of the costs owing. Submissions Pending assessment of the costs of the Appeal, the Respondent sought an Order for payment on account by the Appellant of the costs of the Appeal. The Court referred to CPR 44.2(8) which provides that; 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. The Appellant argued that there was good reason not to make an Order for a payment on account as the Applications to the Court of Appeal for permission to appeal against the decisions of the 2 October and 27 November were outstanding. In the alternative if an Order was made, there should be a Stay of Enforcement pending the outcome of the Applications. The Claimant further argued that the making of the Order for a payment on account would prejudice her, but failed to give any such details, argued that it would cause no

4 Pg. 02 French v Carter Lemon Camerons LLP prejudice to the Respondent and argued that there was insufficient material to enable the Court to properly assess an appropriate sum to be paid. Decision The Court concluded that the outstanding Applications for permission to appeal did not provide a good reason for not making an Order for a payment on account of costs. If permission was granted, the Appeals, may or may not succeed but the whole point of CPR 44.2(a) was to ensure that the winning party was paid part of the costs to which it was entitled to immediately. The Court noted that the Appellant had made many unsuccessful Applications previously. Whilst the Defendant was a large organization the Court noted the sums owing were substantial and that fact provided a good reason for making an Order for payment on account of costs. The Court also pointed out that for the purposes of assessing what payment on account to make, it was not necessary to make a minute calculation of the amount of costs that are likely to be awarded. Having concluded there was sufficient information, the Court went on to order that the Appellant pay two thirds of the costs of the Appeal and thereafter dealt with Summary Assessment of costs of the Hearings on 6 and 27 November Notes The case is noteworthy for two reasons. Firstly in demonstrating that an outstanding application for permission to appeal is not a good reason for refusing to order a payment on account of costs. Secondly it reaffirms that a payment on account of approximately two thirds of the overall costs is considered reasonable.

5 Pg. 03 Excelerate Technology Limited v Cumberbatch and Others Excelerate Technology Limited v Cumberbatch and Others Citation [2015] EWHC 204 (QB) 16 January Background This was a decision of HHJ Simon Brown QC, sitting as a Judge of the High Court. Following Judgment in their favour, the Claimant sought various Orders including that the Defendant pay the costs of the claim on the Indemnity Basis, that the Defendant make a payment on account and importantly that the Claimant s approved Costs Budget be increased. Details Revised and updated Costs Budgets were recorded as agreed at the PTR on 8 September 2014 in the sum of 160, for the Claimant and 84, for the Defendant. Neither Budget made provision for contingencies, none being foreseen at that stage. Submissions The basis of the Claimant s Application to increase the Budget was that when it was last approved at the PTR, it included an additional 2 days Hearing time beyond the Budget previously approved, however there had been 2 further days needed to conclude the evidence and submissions and deal with Judgment and costs in the absence of Solicitor representation of the Defendants who had put the Claimants to proof on everything. There would need to be a pro rata increase in the Budget, there were also additional costs connected with joining Mr. Osmond as a Defendant for the purposes of making a Costs Order against him and there were additional costs connected with the 1 st Defendant s IVA. Decision The Judge made it clear that he could not increase the Budget once the costs had already been incurred, as they had in this case, no previous application for variance had been made and no contingencies had been provided for such items of increase. The decision in Elvanite Full Circle Limited v AMEC Earth and Environmental confirmed that it was too late for the Budget to be increased. However the Judge accepted that the items of costs referred to by the Claimant were properly incurred, were not remotely foreseeable in ordinary circumstances and that it was not practical or viable to make Applications for variance or agree them with Litigants in Person as the first two Defendants had become shortly prior to the Trial. Instead the Judge recorded a note as to the reasonableness and the proportionality of such additional costs for the purposes of

6 Pg. 04 Excelerate Technology Limited v Cumberbatch and Others any Detailed Assessment and further determined that Indemnity Basis costs were appropriate, given that the conduct of the Defendants throughout had been reprehensible. It was confirmed that where costs were ordered on the Standard Basis, the Court would not depart from an agreed or approved Budget, unless satisfied there is good reason to do so (CPR 3.18), but as here, where the costs were to be assessed on the Indemnity Basis, the Claimant will not be so limited by the rules to the agreed Costs Budget but it may in practical terms be a starting point or guide for the Costs Judge on any Detailed Assessment. In terms of the payment on account, the Judge concluded that as the costs were within budget, but there were additional items which might be debatable, 90% of the actual costs were bound to be payable upon any Detailed Assessment and made an Order for a payment on account accordingly. Notes This case confirms that once the costs have been incurred, it is not possible to retrospectively increase the Budget. However, where costs have been incurred as a direct consequence of the paying party s conduct there is provision for the Court to record its comments on the reasonableness and/or proportionality of those additional costs. The decision also confirms that where indemnity basis costs are ordered, the party is not necessarily restricted to the approved Budget. Where a party s costs are within the original Budget and there is an Indemnity Basis costs order, a payment on account at a high percentage of the costs incurred is likely. However the decision does highlight once again the importance, where possible of seeking to vary the Budget before the costs are actually incurred and before the case is concluded. Were it not for the Defendants reprehensible conduct, the Court is unlikely to have been as generous in recording that the additional costs were reasonable and proportionate.

7 Pg. 05 Downing v Peterborough and Stamford Hospitals NHS Foundation Trust Downing v Peterborough and Stamford Hospitals NHS Foundation Trust Citation [2014] EWHC 4216 (QB) 12 December Background This was a clinical negligence case in which liability and causation has been compromised on the basis of the Claimant receiving 63% of damages to be awarded. The Court then went on to award damages in the sum of 1,508,524. Details The Claimant had made a previous Part 36 Offer of 1,200,000 inclusive of interest plus costs. It was therefore clear on the basis of the Judgment that the Claimant had bettered the previous Part 36 Offer. Submissions On the basis that the Claimant had beaten his own Part 36 Offer, the Claimant sought costs to be awarded on the Indemnity Basis from the relevant date, for interest on those costs at a rate not exceeding 10% above base rate and for an additional sum under CPR 36.14(3)(d). The Defendant referred to the Indemnity Costs Provision as punitive, arguing that it was unjust to award Indemnity Basis costs merely because the Defendant had rejected a Part 36 Offer on the basis of incorrect evidence one of the Defendants experts had taken a less optimistic view of the Claimant s prospects of recovery in the witness box, than had been expressed in earlier written evidence. Decision It was clear that the relevant Part 36 Provisions were not intended to punish only conduct which was deemed in some way to be morally reprehensible, or which was in breach of a rule or statutory requirement. A decision had been taken as a matter of public policy to impose sanctions in order to encourage and facilitate settlement of litigation. A Judge should not be tempted to make an exception merely because he or she thinks the regime itself harsh or unjust. In order to depart from the norm, there must be something about the particular circumstances of the case which take it out of the norm. The Court can take into account all the circumstances including the terms of the offer, the stage when it was made, the information available to the parties at the time and the conduct of the parties.

8 Pg. 06 Downing v Peterborough and Stamford Hospitals NHS Foundation Trust The experts in the case had all been somewhat tentative and cautious as to the chance of significant improvement, but there was nothing in the conduct of the Defendant s expert, to justify a departure from the presumption in favour of indemnity costs. The Defendant s advisors made a particular judgment call which turned out (at least at first instance) to have been wrong. An award of Indemnity Costs did not carry with it any implied criticism of their professional skill or conduct. The Court therefore concluded that costs should be assessed on the Indemnity Basis, that there should be interest on those costs at 10% above base rate and in terms of the additional sum payable, could not see any reason why under the new regime the Claimant should not recover the maximum figure. Notes This case reiterates that there has to be a good reason for the Court to depart from the Part 36 Provisions, that just because the regime might seem to be harsh is not a reason for doing so and whilst this case relates to the substantive Proceedings, there is no reason why the same logic should not apply on Detailed Assessment. A sum under CPR 36.14(3) (d) should be paid in circumstances where a Receiving Party successfully recovers more on Assessment than their previous Part 36 Offer. Whilst NWL are aware of certain Courts and certain Judges on Assessment, declining to make an additional award under Part 36, the issue should be pushed and the Court required to give the good reason why an Order is not made. NWL have successfully recovered the additional sum on numerous occasions, on both Provisional and Detailed Assessment.

9 Pg. 07 Yeo v Times Newspapers Limited Yeo v Times Newspapers Limited Citation [2015] EWHC 209 (QB). Background This was a case in which the Claimant was suing Times Newspapers Limited for libel in respect of articles published in the Sunday Times. This decision related to the second Case Management Conference and what was also the Costs Management Conference. Details The parties had filed and exchanged Budgets after service of the Defence on 22 July 2014, just over 7 days before the first CMC. Revised Costs Budgets dated 16 January 2015 were provided for the purposes of the second CMC and in effect the first CCMC. Neither Budget was agreed between the parties. The Court heard some 2 hours of oral argument and determined that it was appropriate to reserve the decision and provide a written Judgment as the case raised issues of general importance on costs budgeting, particularly in publication cases. Decision Hearing or No Hearing Where practical, Costs Management Conferences should be conducted by telephone or in writing CPR 3.16(2). An Oral Hearing was appropriate because of the parties rival contentions as set out in detailed correspondence and because of issues of general importance. However the Judge commented; I do not consider that the detailed oral debate which took place over rates, hours and proportionality would have justified a Hearing. Incurred Costs The Judge reaffirmed that these were not subject to the approval process, that in cases such as this, substantial costs are likely to have been incurred but that those costs could be taken into account when considering the reasonableness and proportionality of the Budget.

10 Pg. 08 Yeo v Times Newspapers Limited The Approach to Approval Whilst Costs Management was not a prospective Detailed Assessment, the Judge took the view that in determining whether the totals for each phase were reasonable and proportionate, the Courts would need to consider rates and estimated hours. The Judge concluded it was appropriate to have regard not only to the factors listed in CPR 44.3(5) but also to the hours and rates as would be done on a Summary Assessment. Contingencies and Revision The Judge noted that between the parties six contingencies had been identified and not one was common to the parties. The Judge confirmed that contingencies must involve work that does not fall within the main categories on Precedent H and that to qualify as a contingency, it had to be possible to identify to the opposite party and the Court what the work should be and how likely it needs to be that the work will be required. An item should only be included as a contingency if it is foreseen as more likely than not to be required. The Judge then considered the various Budgets, determined that none of the contingencies in the Claimant s Budget met the criteria for a contingency and were therefore marked not applicable. In the Defendant s Budget, the costs of the budgeting process, e.g. Costs Management, were separately identified and were allowed, on the basis they did not exceed the 2% cap. Notes This case does not identify anything new, however it does demonstrate the process that was undertaken in budgeting costs on this substantial case and confirms that the presumption is in favour of most budget issues being dealt with on paper. Useful guidance is provided generally.

11 Pg. 09 Contacts and Company Information Contacts and Company Information Contacts Information If you have any queries about the cases referred to in this Costs Update, want to subscribe for future updates or to discuss any aspect of what we do and can do for you please contact: Name Lee Evans Title Director Tel Name John Hocking Title Director of Business Development Tel Company Information NWL Costs Lawyers Queens House, Queens Road Chester CH1 3BQ Tel Fax

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