CPR update introduces greater clarity on incurred costs
The 109th update to the CPR is introducing a change to practice direction 3E that provides clearer guidance on the cut-off between budgeted and incurred costs.
Paragraph 7.4 currently states that “the court may not approve costs incurred before the date of any costs management hearing”. From 1 October 2019 “before the date of any” will be replaced with “up to and including the date of the”.
Meanwhile, another change coming into force on 1 October will add statutory reviews which relate to national environmental law to claims covered by the Aarhus Convention cost protection regime. This is subject to parliamentary approval.
Second appeal rejected over decision to award interim payment of costs in long-running case
The Court of Appeal has refused an application for a second appeal in a long-running clinical negligence case where a circuit judge backed an interim payment of costs to the claimant’s solicitors.
In HI v Hull and East Yorkshire Hospitals NHS Trust, His Honour Judge Robinson in Sheffield said that “failure to ensure adequate cash flow during the period of inevitable delay may lead to the perverse and undesirable consequence that solicitors are unwilling to take on cases such as this at an early stage”.
He continued: “It is in everyone’s interests to determine liability as early as possible. But, if the consequence is that solicitors must then fund the quantum investigation for 10 years or more, they may not be anxious to take the case on early.”
According to the claimant’s solicitors, Yorkshire firm Switalskis, the Court of Appeal has rejected the defendant’s application for a second appeal and to stay execution of the interim costs payment.
In his written refusal of permission to appeal, Irwin LJ said it was “entirely proper… to order interim costs payments with a view to the cash flow of solicitors in very long-lasting litigation where very significant liability has been conceded”.
This was “particularly so” in the case of specialist solicitors who may be facing such problems in a range of cases.
This was subject to the “key consideration” of preserving security for a defendant so there was “no appreciable risk of a need to repay costs paid on an interim basis”.
According to Switalskis, Irwin LJ rejected the defendant’s suggestion that the court had no jurisdiction to make such orders, finding that in such a case the term ‘successful’ or ‘unsuccessful’ party “may readily be defined to mean ‘will succeed sufficiently to justify the further costs sought’”.
He rejected the second ground of appeal proposing an exceptionality test before the court should exercise its discretion in making interim costs payments.
The defendant also unsuccessfully argued that the absence of any part 36 offers should not have been brought to the attention of the judge below.
The existence or absence of any part 36 offer was actually a “highly relevant circumstance” in exercising the discretion to make a further interim payment in respect of costs, Irwin LJ said.
Suzanne Munroe, a director and head of clinical negligence at Switalskis, said: “This decision is one of real importance to claimant firms who are dealing with complex cases of this nature… We have anywhere between 50 and 100 of these cases being litigated at any one time [and the decision] means we can continue to conduct this complex and vital litigation on an equal footing with defendant firms.”
Switalskis instructed Michael Mylonas QC of Serjeants’ Inn Chambers.