Group litigation: a determination of costs related to common issues

Bates & Ors v Post Office Ltd [2019] EWHC 1373 (QB)

This was a costs decision following determination of 23 common issues in group litigation between several hundred sub-postmasters and The Post Office. It dealt with a number of issues, including:

  • Whether the costs of the Common Issues should be reserved;
  • Who should pay the costs of the Common Issues and in what proportion;
  • Whether the costs be assessed on the standard or on the indemnity basis;
  • An application for an interim payment on account;
  • Timing of the detailed assessment of the costs; and
  • Whether budgeted costs should be subject to detailed assessment at all.

It was ultimately decided that having succeeded on 16 of the 23 issues before the Court the Claimants were entitled to their costs on the standard basis albeit with a modest reduction of 10% to reflect both this success and “the increase in the trial complexity and length due to the way that the Post Office put facts relating to [its case]”

The Court declined to reserve the costs on grounds that it would not be consistent with the principles included in CPR Part 44, CPR Part 46.6, or the overriding objective in CPR Part 1.1 itself.

A payment on account in the sum of £4.56m plus VAT and budgeting costs was awarded by reference to the Claimants’ last approved budget, allowing 60% of the incurred costs and 90% of the budgeted costs, subject to the 10% deduction.

The parties having adopted a neutral stance on when the detailed assessment of costs should take place the Court declined to impose a “forthwith” order but commented that if the parties were to agree, of their own volition, to commence the process of detailed assessment then the detailed assessment could commence whenever such agreement were reached.

Finally, The Hon. Mr Justice Fraser rejected a submission by the Claimants that by virtue of the fact that budgeted costs had been approved there need be no detailed assessment in respect of those costs.

“The submission made by the Claimants that their budgeted costs should not be subject to detailed assessment is, in my judgment, a bold one. It arises, I consider, from a misunderstanding of what a “payment on account” is for, or means, or perhaps more accurately, upon what event costs are being paid “on account” … Without any assessment, the question could be posed “on account of what?”