Court Of Appeal Defends Interim Costs Payments In Long Running Clinical Negligence Matters

Payments on account in long running clinical negligence cases

We previously reported on the decision of HHJ Robinson on appeal in the County Court at Sheffield where he overturned District Judge Batchelor’s refusal to allow a second interim payment in a long running clinical negligence matter where 90% liability had been admitted and it was agreed that determination of quantum would not be possible until 2022, commenting 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 case [sic] such as this at an early stage.”

The defendant has been refused permission to appeal this decision by the Court of Appeal.

The Rt Hon Lord Justice Irwin firstly rejected the defendant’s argument that the court had no jurisdiction to make such an award to a party who had yet to be “successful” within the meaning of CPR 44.2(2)(a), finding:

“the terms “unsuccessful” or “successful” parties cannot be confined to a binary [outcome] of the whole case. Here the term may readily be refined to mean “will succeed sufficient to justify the further costs sought”. 

He determined that the critical facts of the case were:

(1) there is an acknowledged 90% liability;

(2) the claim is very large and will far exceed the interim payments awarded.

(3) there will be an exceptionally long period before quantum can be finalised, for the reasons set out by the judge;

(4) there has been no Part 36 offer; and

(5) the judge has assessed there is effectively no risk that the costs now sought will prevent future set-off of costs to be paid to the Defendant, whether against costs due, or damages due, to the Plaintiff.

He rejected the notion that the fact or absence of a Part 36 offer should not have been brought to the judge’s notice, or that it was irrelevant:

“A Part 36 offer is to be treated as “without prejudice except as to costs” (CPR 36.16(1 )) and the terms “must not be communicated to the trial judge until the case has been decided” (CPR 36.16(2))… The Part 36 offer (or its absence) was brought before the Court on a question of costs, and HHJ Robinson was not the trial judge. It seems to me a highly relevant circumstance in adjudging the key point: was there a risk of an overpayment of costs by the Appellant?”

Finally, subject to the “key consideration” of preserving security for a defendant against an appreciable risk of overpayment, he concluded that:

“it seems entirely proper to me to order interim costs payments with a view to the cashflow of solicitors in very long-lasting litigation, where very significant liability has been conceded. That must particularly be so in the case of specialist solicitors who may be facing such problems in a range of cases.”