The recent case of Reid –v- Wye Valley NHS Trust [2023] EWHC 2843 (KB) provides a timely reminder as to the Court’s power when they are making an Order for Costs. At a Case Management Hearing, the usual Order is “costs in the case”. As that may be, the Court does hold discretion to make a different Order if they consider it appropriate; that power was exercised in this case.
The Claimant was pursuing a Clinical Negligence claim, which was valued at circa £1m. Liability was disputed (Breach of Duty and Causation) and the matter had been Case Managed prior by Master Stevens. The case came before Master Brown for Costs Management, who reduced the Claimant’s Costs Budget substantially.
Master Brown commented that there had been little allowance for delegation from a Grade A to a Grade D Fee Earner; for example Issue / Statements of Case Phase claimed 47 hours of Solicitors time, all at Grade A, with no input from a Junior Fee Earner; together with Counsel’s Fees resulting in a claim of over £26,000 for this Phase alone. Further examples included Experts Phase claiming 226 hours for a Grade A Fee Earner, compared to just 2 hours for a Grade D Fee Earner; this on-top of around £89,000 for Experts Fees. Master Brown also commented that a claim of over £50,000 for a Solicitor’s attendance at a 10-day Trial, plus expenses of £5,500 was outside the range he expected to see.
Details of the substantial reductions would of course provide context to the above, however those details were not included in the Judgment of Master Brown.
At the end of the Costs Management conference, the Defendant sought an Order that there be “No Order as to Costs” given the Claimant’s failure to make reasonable endeavours to negotiate the Costs Budgets. Master Brown adjourned the point so that the Parties could make submissions on the point and so that Master Brown himself could also see the relevant papers on the point.
One initial point, which is not entirely relevant to the Costs Management issue, is that the Defendant had referred the Master to “Without Prejudice” documents. Though the Master agreed privilege had been waived, this is an important practice point, if you wish to rely upon a document at Court, careful consideration ought to be given as to whether to mark a document “Without Prejudice”.
When considering whether to make a different Order than the usual “Costs in the Case” Order, the Master considered CPR 44.2, which gives the Court discretion when making an Order for costs; more specifically CPR 44.2(5) was considered which dealt with the parties conduct.
When considering these Factors, Master Brown aired his view that the Claimant had made claims for unrealistically high sums in their Costs Budget, which were “pursued and maintained at the Hearing” and that was his particular concern on this point. Master Brown also considered the comments from Findcharm Ltd v Churchill Group Ltd wherein the Defendant in that case put in unrealistically low Costs Budgets in a “low ball” tactic, and whilst the situation in this case was somewhat the reverse, it gave Master Brown “confidence that it is appropriate in some way to reflect concerns about unrealistic budgets in the costs order”.
Master Brown also looked at the parties’ offers, given that the main contention of the Defendant was that the Claimant had failed to make realistic offers; however Master Brown confirmed this did not add much to his concerns or impact the decision he had to make. Master Brown made an order that costs would be in the case, save that there would be a 25% reduction to the costs of Costs Management, if the Claimant went on to recover their costs.