A round-up of some recent litigation cases – June 2018

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We've brought together a round-up of some recent litigation cases that may be of interest to you.

Non-party costs orders against insurers

The Court of Appeal upheld a non-party costs order made against the insurers of an unsuccessful and insolvent defendant in the PIP breast implant litigation. Since the insurers were required by the policy to pay the costs of defending the common issues which affected both the insured and the uninsured claims and must have expected to pay for all the costs of an unsuccessful defence of the preliminary issues, it was only fair in the circumstances to order them to pay the costs of the 426 uninsured claimants (Travelers Insurance Co Ltd v XYZ).

No oral modification clauses

The Supreme Court has overturned the Court of Appeal's ruling that a no oral modification clause did not prevent a valid variation by oral agreement. NOM clauses are binding and cannot be varied orally. Where one is present, parties must comply with the formalities set out in the contract, and cannot vary them by an oral agreement. Party autonomy operates up to the point when the contract is made but thereafter only to the extent that the contract allows (Rock Advertising Ltd v MWB Business Exchange Centres Ltd).

Failure to file a court budget

Where the defendant fails to file or serve a costs budget, and does not obtain relief from sanctions, they are to be treated as having filed a budget comprising only the applicable court fees pursuant to CPR 3.14. Where they have also made a successful Part 36 offer, CPR 36.23(2)(a) entitles them to recover 50 per cent of their assessed costs from the end of the relevant period. The defendant’s contention that CPR 36.23(2)(a) does not apply to costs incurred during the period before the costs management hearing was rejected (Ali v Channel 5 Broadcast Ltd).

Effect of budget at detailed assessment

A reduction in hourly rates when assessing incurred costs is not a good reason under CPR 3.18 to depart from the budget in respect of future costs at detailed assessment. The lack of scrutiny of the hourly rates claimed may encourage parties to incur costs up to the budget phases but concern about this inflationary element has to yield to the pragmatic aim of making detailed assessments shorter (Jallow v Ministry of Defence).

Costs on discontinuance

If a claimant discontinues their claim, the default rule under CPR 38.6(1) is that they should pay the defendant's costs. Where new evidence, fatal to the claimant’s case, emerged inexcusably for the first time during the cross-examination of one of the defendant's factual witnesses, the default rule should not apply. The claimant was ordered to pay the defendant’s costs up until the date of service of a report in which his case was clarified and there was no order for costs thereafter (Harrap v Brighton and Sussex University Hospitals NHS Trust).
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