The court was required to determine whether a costs order made against the Claimant (C) in favour of the third defendant (D3) could, pursuant to the principle in Lockley v National Blood Transfusion Service (1992) 1 WLR 492, be set off against any damages or costs awarded to C from the other Defendants.
C had brought an action comprising two false imprisonment claims resulting from his recall to prison.
The first related to his recall between September 2006 and August 23, 2007 and the second to a failure to release him on time during a one-week period from 24 to 31 August 2007.
The action had been funded by the Legal Services Commission.
The claim relating to the first period had been struck out on the basis that there were no reasonable grounds for bringing it, and C had been ordered to pay D3’s costs.
C submitted that it was not equitable to set off D3’s costs relating to the first period against damages recoverable for the second period because the two claims were not sufficiently connected.
In rejecting the Claimant’s arguments, The Hon Mr Justice Supperstone found…
In my view they are so closely connected so as to make it equitable to set one off against the other. They relate to two parts (albeit one longer, one shorter) of the Claimant’s imprisonment between 5 September 2006 and 31 August 2007 which the Claimant alleges was, in its entirety, unlawful and in respect of which he brought claims for false imprisonment and for breach of his Article 5 and 8 rights against the Third Defendant…
If a set-off of costs against damages is justified, as in my view it is in the present case, then the fact that the Commission will not recover the benefit of the damages to reduce the burden on the Fund is not to the point. The Commission decided to fund the action which to date has failed. The Third Defendant has incurred very substantial costs and should, in my view, be entitled to enforce the costs order made in its favour (which may not be enforced directly against the Claimant without the leave of the court as he is publicly funded) “by way of set-off against any award of costs and/or damages made in favour of the Claimant in these proceedings…
And lastly…
I reject Mr Bowen’s third submission that it is premature to determine a Lockley argument now and it should be for the trial judge to exercise his discretion or the parties to agree terms. In my view the present case is distinguishable from Morgan v MoJ [2010] EWHC 2248 (QB). In Morgan the court had tried three preliminary issues which were not themselves decisive of the Defendant’s liability to the Claimants. By contrast in the present case the court has struck out a very substantial part of the Claimant’s claim against the Third Defendant as unarguable. I agree with Mr Sanders that all relevant factors going to the appropriateness of a Lockley set-off as against damages are amenable to immediate assessment.
Link to Judgment
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