Refusing to mediate
The defendant solicitors had unreasonably refused to mediate but the court rejected the argument that they should be penalised by paying the claimant’s costs on the indemnity basis. The claimants had claimed damages of £4.3 million and only recovered £1.4 million so the defendants had resisted a significant part of the claim. They had also done significantly better than the claimant’s Part 36 offer to accept £3.5 million (Richards v Speechly Bircham LLP).
Calderbank offers and costs
The claimant artist suffered a serious brain injury in a road accident. He claimed damages of more than £33 million and was awarded a little short of £3.2 million at trial. The claimant failed to beat two Calderbank offers made by the defendant insurer. Because those offers were much closer to the final figure awarded than any of the claimant’s offers (the lowest of which was to accept £7.25 million), it was appropriate to reduce the claimant’s recoverable costs by 45% for the relevant period. It was also appropriate to make an issue-based costs order: an additional 15% reduction reflected the claimant’s failed claim for provisional damages for the risk of developing dementia (Mathieu v Hinds and Aviva).
The defendant applied for an order in a group action striking out the entirety of four of the claimants’ witness statements and parts of 29 statements. The judge concluded that the application, which succeeded in part, was fundamentally inappropriate and was “a piece of strategy…by a party with deep pockets and presented a major distraction in the run-up to trial”. PD 57AC should not be used as a weapon for the purpose of battering the opposition. He ordered the defendant to pay 75% of the claimants’ costs on the indemnity basis (Curtiss v Zurich Insurance Plc).
Guideline hourly rates
The judge refused to take London 1 guideline hourly rates as the starting point for summary assessment of the defendant’s costs. London 1 rates apply to "very heavy commercial and corporate work". London 1 is not restricted to purely transactional matters. The work done on the two applications in question could not be described as “heavy” let alone “very heavy” so London 2 rates ("other work in the City or central London") were the starting point for assessment. There were no factors justifying hourly rates significantly in excess of the guideline figures (Brake v Guy).
Where a litigation funder had by far the dominant financial interest in the outcome of, and effectively controlled, the proceedings, it was appropriate to order them to pay the defendants’ costs from a date preceding the litigation funding agreement (LFA). The court rejected the argument that the funder should only be liable for costs incurred after the date of the LFA and that it should only be liable for a percentage corresponding to its percentage contribution to the total funding after that date. The court also refused to delay making an order to enable the funder to bring in the other funders (The ECU Group Plc v HSBC Bank Plc).
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