Bonsor v Bio Collectors Ltd

This Judgment concerns a dispute between the Parties over costs. On 20 March 2020 judgment on liability (’the Liability Judgment’) was handed down following a twoday trial. The neutral citation number is: [2020] EWHC 669 (QB). I found that the Defendant’s employee, Mr Rodrigues, drove his Renault Premium lorry negligently and caused the Claimant’s injuries. The Defendant, having accepted vicarious liability for Mr Rodrigues is therefore liable to pay damages, which will be assessed, if necessary, at a later trial. I found no contributory negligence on the Claimant’s part.

The Claimant also pursued allegations against the Defendant itself relating to three pieces of additional equipment, which she stated should have been fitted to the Renault Premium. First, proximity sensors, secondly, a Fresnel lens and thirdly, a speaker warning that the lorry was turning left (paragraph 20(l) of the Particulars of Claim). In opening the case, Mr Sanderson, for the Claimant, stated that the allegations relating to the proximity sensors and speakers were not being pursued because causation could not be established. The allegation concerning a Fresnel lens was pursued and I dismissed that part of the claim (see paragraphs 93 to 96 of the

The Parties were able to agree an order following receipt of the Liability Judgment, apart from the Defendant seeking an issue-based cost order limiting its liability to 80% of the Claimant’s costs. This was to reflect the Claimant’s failure to prove the allegations pleaded at paragraph 20(l). This was disputed by the Claimant. The Parties agreed that I should determine this issue on the papers following receipt of written submissions.

I circulated a draft judgment to the parties on the morning of 23 March 2020 inviting them to submit a schedule of corrections of typographical errors. The Claimant responded substantively applying for permission to make further submissions. This was on the basis that there was a mistake of fact and a mistake of law in the draft judgment. In particular, first, that I had over assessed the amount of time taken up at the trial by the litigation of the Fresnel lens issue. Secondly, I had misstated the law in J Murphy & Sons Limited v Johnston Precast Limited [2008] EWHC 3104 (TCC).

The Parties are agreed that I have a discretion whether or not to receive further submissions and reconsider a draft judgement. I was referred to the notes in the White Book following CPR 40.2 and in particular to the cases of Re Barrell Enterprises [1971] 1 WLR 19, CA and Re L (Children) (Preliminary Finding: Power to Reverse) [2013] UKSC 8. In rejecting the need for exceptional circumstances derived from Re Barrell, at paragraph 27 Baroness Hale of Richmond JSC stated:

“[The] overriding objective must be to deal with the case justly. A relevant factor must be whether any party has acted upon the decision to his detriment, especially in a case where it is expected that they may do so before the order is formally drawn up. On the other hand, in re Blenheim Leisure (Restaurants) Ltd, Neuberger J gave some examples of cases where it might be just to revisit the earlier decision. But these are only examples. A carefully considered change of mind can be sufficient. Every case is going to depend upon its particular circumstances.”

The situation here is different as it concerns a draft judgment. This situation is covered in the White Book at paragraph 40.2.1.2. I was specifically referred to Egan Motor Services (Bath) [2008] 1 WLR 1589 at paragraph s 50 and 51 where Smith LJ stated that it is only in the most exceptional circumstances that it is appropriate to ask the judge to reconsider a point of substance in a draft judgment. Examples of such circumstances were given. First, where the judge had not given adequate reasons for some aspect of the judgment. Secondly, where the judge had decided the case on a point that was not properly argued, or relied on an authority which was not considered.

In his original submissions on costs, Mr Sanderson, made a number of points in support of his argument that the issues in paragraph 20(l) made a negligible influence on the quantum of the Claimant’s and Defendant’s costs. In particular, he argued that the trial was not lengthened by the issue of the Fresnel lens and the case would have required 2 days of court time in any event. Mr Browne submitted that the Fresnel lens issue extended the preparation and trial time and that the ‘majority of the (not inexpensive) evidence of the experts was devoted to the Fresnel lens issue.’ Mr Browne did not make any submissions on how I should reach a conclusion on what proportion of the costs were attributable to the Fresnel lens issue.

In the draft judgment I stated ‘The vast majority of the evidence given on the second day of trial by the 2 experts related to the issue concerning the Fresnel lens. In the event of that issue had not been pursued Mr Sanderson’s opening would have been shorter and taking it in the round, I consider that the trial would have been completed within one day.’ I also used the front sheet of the precedent Hs in the trial bundle to reach a conclusion that 50% of the trial costs were attributable to the Fresnel lens issue and that represented, when taken with trial preparation costs, 8% of the Claimant’s total costs as claimed.

Accompanying his further submissions, Mr Sanderson provided an analysis prepared by his pupil which records the timing of sittings during the 2 days and the events that were taking place. A column is headed ‘approximate time spent on issue of Fresnel lens.’ According to those figures the court sat for approximately 510 minutes and approximately 80-85 minutes was spent on the issue the Fresnel lens.

Mr Sanderson’s submission on this issue was that my conclusion was plainly wrong on the facts. The draft judgment was founded upon my assessments that first, the trial would have concluded a day early and secondly, on the amount of time spent by the experts on the Fresnel lens issue on day 2. Mr Browne’s submissions were that the Claimant had become hidebound by the timetable of the trial. The length of trial was one factor relied on in the draft judgment, a substantial part of the evidence on day 2 was on the Fresnel lens and the Court’s conclusion was correct.

There is a significant difference between my estimation of 50% of trial time being occupied by the Fresnel lens issue and the 17% (rounded up) from the analysis in the note from Mr Sanderson’s pupil. The analysis in the draft judgment of the proportion of costs that the Defendant was to pay the Claimant was not solely based on the percentage. However, I will consider Mr Sanderson’s further submissions on this point in order to deal with the case justly as first, there is significant difference between the estimations of trial time, even though it is only one consideration. Secondly, my use of the percentage figures was not something on which I had received submissions. I conclude that these amount to exceptional circumstances.

Mr Sanderson in his further submissions made a number of points on why I had misstated the law in Murphy. Mr Browne submitted that the Claimant’s reliance on the dicta of Mr Justice Coulson (as he then was) in Murphy as an overriding authority was overly dependent to the exclusion of other factors. To some extent, Mr Sanderson’s further submissions on Murphy are related to his further submissions concerning the percentage of court time. On the one hand, Mr Sanderson’s further submissions may be seen as an attempt to re-argue a point. On the other hand, they may be read as a request for further reasons. I will consider Mr Sanderson’s further submissions in the context of providing further reasons for my conclusion and because they are related to the issue at paragraph 11 above.

I reiterate, as is made clear in the authorities, this is an exceptional course of action, based on the particular circumstances arising in this case.

The Civil Procedure Rules (CPR) at Rule 44.2 set out the relevant provisions:

“44.2— Court’s discretion as to costs

(1)

The court has discretion as to—

(a)

whether costs are payable by one party to another;

(b)

the amount of those costs; and (c) when they are to be paid.

(2)

If the court decides to make an order about costs—

(a)

the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party; but (b) the court may make a different order.

…

(5)

In deciding what order (if any) to make about costs, the court will have regard to all the circumstances, including—

(a)

the conduct of all the parties;

(b)

whether a party has succeeded on part of its case, even if that party has not been wholly successful; and

(c)

any admissible offer to settle made by a party which is drawn to the court’s attention, and which is not an offer to which costs consequences under Part 36 apply.

(6)

The conduct of the parties includes—

(a)

conduct before, as well as during, the proceedings and in particular the extent to which the parties followed the Practice Direction—Pre-Action Conduct or any relevant preaction protocol;

(b)

whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;

(c)

the manner in which a party has pursued or defended its case or a particular allegation or issue; and

(d)

whether a claimant who has succeeded in the claim, in whole or in part, exaggerated its claim.

(7)

The orders which the court may make under this rule include an order that a party must pay—

(a)

a proportion of another party’s costs;

(b)

a stated amount in respect of another party’s costs;

…

(f)

costs relating only to a distinct part of the proceedings; and

….

(8)

Before the court considers making an order under paragraph (6)(f), it will consider whether it is practicable to make an order under paragraph (6)(a) or (c) instead. [(6)(c) is not relevant]”

I was referred to the notes in the White Book at 44.2.7, 44.2.8 and 44.2.10 and a decision of Mr Justice Coulson (as he then was) in J Murphy & Sons Limited v

Mr Sanderson submitted that there needed to be a reason based on justice to depart from the general rule that the unsuccessful party will be ordered to pay the costs of the successful party. He submitted that justice was strongly in favour of the Defendant paying all of the Claimant’s costs for a number of reasons relating to the conduct of the case by the Defendant. These included running a hopeless defence, refusing to make an interim payment, refusing to engage in the Rehabilitation Code, making a

For the Defendant, Mr Browne’s submissions were that the Defendant sought a reduction in the Claimant’s costs to 80% (or such sum as the court deemed fit) based on the Claimant being unsuccessful on the allegations in paragraph 20(l). He made the point that the effect of those allegations, if proven, would have been felt throughout the industry. He submitted there was a good reason to depart from the general rule and the conduct of the Claimant was relevant. A proportion of the costs should be awarded to the Claimant, given the wasted time and cost of pursuing the failed allegations, in particular because they were a distinct part of the proceedings. The court had a discretion to order that a party pays a proportion of another party’s costs, which was a broad-brush exercise where detailed analysis of court time and documents may be of little assistance. Mr Browne pointed out the late stage at which some of the allegations were abandoned and that this caused the Defendant to incur costs. It was for the Claimant to prove her case and he pointed out the Defendant produced the Dodd Report (see the Liability Judgment) for the purposes of cross examination. The Fresnel lens issue extended trial time and preparation time and he pointed to the comments in the Liability Judgment at paragraphs 86 to 94, the conclusion of which I have referred to at paragraph 2 above.

In the draft judgment in answer to the question: ‘Do the allegations in paragraph 20(l) represent a discrete issue?’ I stated that: ‘There is no dispute that the Claimant was the successful party overall. Notwithstanding, I have to consider whether the Claimant was unsuccessful on a discrete or circumscribed issue.’ Further on in the draft judgment, as part of the determination of whether it was ‘appropriate in all the circumstances, not to award the Claimant the costs of the issue?’ I asked myself the question posed in Fleming and quoted in Murphy: ‘am I able to say that there was any discrete issue or matter pleaded which added sufficiently to the length of the trial to necessitate displacing the prima facie rule that costs should follow the event?’

Mr Sanderson submits this was the wrong approach and that at Paragraphs 9 and 10 of Murphy Mr Justice Coulson specifically rejected a submission that the court had to consider whether to make an issue-based costs order in all cases where the successful party had been unsuccessful on a discrete issue. He stated that Mr Justice Coulson was clear that, after a party had been successful at trial, an issue-based costs order

Mr Sanderson stated that relying on the judgment of Mr Justice Coulson in Murphy, the editors of the White Book summarise the position at law in proposition 4 of at the conclusion of section 44.2.10 (p1364 of the White Book):

“4.

There is no automatic rule requiring an issue-based cost order in the form of a reduction of a successful party’s costs if he loses on one or more issues (HLB Kidsons v Lloyds Underwriters [2007] EWHC 2699 (Comm); [2008] 3 Costs L.R. 427 (Gloster J) at para.10). The mere fact that the successful party was not successful on every last issue cannot, of itself, justify an issue-based costs order (J Murphy & Sons Ltd v Johnson Precast Ltd (No.2) [2008] EWHC 3104 (TCC);

[2009] 5 Costs L.R. 745 (Coulson J) at para.10).”

Mr Browne distinguished the present case from Murphy as it was not one where the Claimant succeeded on some allegations of negligence and failed on others. The wholly separate allegations against the Defendant itself (as opposed to those based on vicarious liability) were quite distinct.

There is no application that the Claimant pays the Defendant’s costs of defending the paragraph 20(l) allegations. The issue is whether the Claimant should be deprived of a proportion of her costs of bringing the allegations. There are a number of the parts of the notes in paragraph 44.2.10 which are relevant that I was not referred to and given Mr Sanderson’s submissions it is now necessary for me to set them out:

I reject Mr Sanderson’s submission that it is wrong to ask if the issue on which the party lost was a discrete issue. There must be an issue or else there could not be an issue-based costs order. The authorities referred to in the White Book refer to it as a

I also reject Mr Sanderson’s submissions on Murphy to the extent that the test in Fleming is not to be followed. First, Fleming is a Court of Appeal authority and I have not been told why I am not bound by it. Secondly, Murphy bears some close analysis.

The submission Mr Justice Coulson rejected was: ‘as a matter of principle, [the test in Fleming] was the question which the court had to ask itself in every case in which an issue-based costs order was sought.’ Mr Sanderson has changed this to: ‘a submission

Mr Justice Coulson having been referred to the case of Fleming and the test which it contains, concluded at paragraph 10 of Murphy that ‘in a case like this’ an issue-based cost order was inappropriate. What sort of case was it? Previously at paragraph 8 the judgment stated: ‘…there is no difficulty in identifying [the defendant] as the successful party. The claimant recovered nothing and lost each of the significant issues (as to contract terms, breach and causation in fact and law) along the way.’ It was an ‘all-or-nothing case.’ Mr Justice Coulson concluded by analogy to other cases to which he had been referred, that it was not an appropriate case for an issue-based costs order. Those other cases had significant elements where the relevant party had lost and there was a difficulty in identifying the successful party.

Mr Justice Coulson went on, nevertheless, to consider the application of the test in Fleming in the subsequent paragraphs. Although framed in the context of the application of the test in Fleming, they make it clear that there were no discrete issues in Murphy. At paragraph 12 Mr Justice Coulson deals with the Claimant’s submission on the two issues on which it was said the Defendant was unsuccessful. First, the argument as to the existence of a contract and secondly, an issue about ‘alkaline attack.’ As to the first issue at paragraph 13 Mr Justice Coulson stated: ‘I am in no doubt that it would be wrong to characterise the contract/no contract issue as an issue in its own right which had a significant effect on costs…the [Defendant’s] argument that there was no contract was part of a much wider series of contentions designed to demonstrate that [the Defendant] owed no fitness for purpose obligation to the [Claimant]..’ As to the second issue at paragraph 15 Mr Justice Coulson makes it clear that the argument concerning the alkaline attack was part of the overall argument on which the Defendant was ultimately successful. It is evident that the conclusions were that the matters on which the Defendant was unsuccessful were not discrete issues. Nor did the issues analysed add materially to the length of trial.

The statement in the last sentence of paragraph 10 of the judgment is: ‘In my view, the mere fact that the successful party was not successful on every last issue cannot, of itself, justify an issue-based cost order.’ In Murphy, the case arose out of a claim for breach of contract and although the defendant was not successful in all of its arguments, those issues where not discrete. The claimant had lost on all the significant issues. In those circumstances, the key was that the ‘mere fact’ of being unsuccessful on some of the issues was not enough to justify an issue-based costs order. There needed to be more to justify an issue-based order.

On the basis of my analysis, I consider the above question. There is no dispute that the Claimant was the successful party overall. Notwithstanding, I have to consider whether the Claimant was unsuccessful on a discrete or circumscribed issue. The allegations at paragraph 20(l) were pursued against the Defendant in its own right, as opposed to as a matter of vicarious liability. In relation to breach of duty there was no overlap with the evidence concerning the other allegations. The evidence on causation overlapped with the other allegations on which the Claimant succeeded. The Claimant would have recovered 100% of her losses even if she had been successful on the paragraph 20(l) issues alone. They added nothing to the quantum of the claim.

In any case, CPR 44.2(4) requires all the circumstance of the case to be taken into account including the conduct of the parties and that includes CPR 44.2(5)(b) and (c). It was reasonable for the Claimant to raise the allegations in paragraph 20(l) in the sense that, at first sight, they appear to be issues worthy of determination. However, as I stated in the Liability Judgment the Claimant’s evidence was in an unsatisfactory state and insufficient to prove the allegations. It was not reasonable to pursue those allegations on the basis of the evidence presented at trial, despite what Mr Sanderson submitted about the experts’ agreement on relevant bodies recommending the use of the equipment to which they refer. This is a feature in favour of not awarding the Claimant the costs. I reject any criticism that is made of the Defendant in relation to the state of the evidence, as it is for the Claimant to prove her case. The complaints Mr Sanderson makes about the Defendant’s conduct in contesting liability for the driver and the weakness of the defence, whilst indicative of the Defendant’s conduct in relation to the other allegations, add little to my consideration in relation to the unsuccessful allegations. I also do not accept Mr Sanderson’s submission that if the experts had addressed the 2 questions in the expert agenda that they would not have been required at trial. As Mr Browne says, this was a significant issue for the industry as a whole and it is likely that pursuing these issues meant that the experts were going to be giving evidence on them. Furthermore, 2 of the allegations in paragraph 20(l) were abandoned at a very late stage. Mr Sanderson says in his written submissions that this occurred once the Claimant was clear that she could not establish causation and in particular as the Court found because the Defendant driver had negligently failed to indicate the turn, until he had already committed to his manoeuvre. I do not accept that submission, the Claimant could have reached that conclusion at an earlier point, not least at the time of the experts’ joint statement. These are features in favour of not awarding the Claimant the costs.

Mr Sanderson complains that the Defendant’s part 36 offer was inadequate. As it has turned out that is true. However, I have no information on any offers made by the Claimant. Furthermore, the Defendant did not have a mechanism to dispose of the paragraph 20(l) allegations separately as the damage caused, if proved, was the same as with the remaining allegations. These features I treat as neutral on the question.

I also ask myself the question posed in Fleming quoted in Murphy: am I able to say that there was any discrete issue or matter pleaded which added sufficiently to the length of the trial to necessitate displacing the prima facie rule that costs should follow the event? The factual evidence was concluded early on the first day of trial. Mr Browne’s submission and my recollection were that the significant issue on day 2 was the expert evidence on the Fresnel lens and this is consistent with my notes of evidence. However, Mr Sanderson’s pupil’s assessment gives a different quantitative analysis of time spent and although I do not accept it as being definitively accurate, I

I bear in mind that there is no automatic rule that the Claimant’s costs should be reduced. Furthermore, it is necessary to take into account all the circumstances, including those I have referred to from paragraph 31 onwards. These are circumstances that take the case outside the ‘mere fact’ that the Claimant was not successful on every last issue. In doing so, I conclude it is appropriate to reduce the Claimant’s costs, the reason based on justice for departing from the general rule is that time and costs would have been saved on preparation and trial, if these discrete allegations had not been pursued. I note in particular the comments of Lord Woolf MR quoted at paragraph 5 above and find them particularly relevant to the circumstances of this case.

Accordingly, I find that this is a case in which an issue-based cost order may be made. However, it is necessary for me to consider, before making any such order, whether it is practicable to make an order that the Claimant receives a proportion of her costs (CPR 44.2 (7)). Making an issue-based order in this case may lead to difficulties on any detailed assessment in disentangling the costs, in particular as they relate to causation. It is therefore appropriate to consider whether or not an award of the proportion of the costs is practicable.

In light of Mr Sanderson’s further submissions, it is necessary to expand upon the law in this area looking at the submissions that Mr Browne made concerning the exercise being a broad-brush one and the cases referred to in the notes in the White Book paragraph 42.2.8. In particular Sycamore Bidco Ltd v Breslin [2013] EWHC 583 (Ch) Mr Justice Mann stated:

“Having indicated that I would be minded to make an issuebased costs order in respect of the major issues on which the claimant lost, I am required by CPR 44.3(7) to consider making a proportionate order instead. I shall do so. Having said that, it is a difficult exercise. Assessing the court time involved in the various issues is a quasi-scientific way of starting on the activity, but it is less than wholly satisfactory because it is not necessarily a guide as to the pre-trial costs which, in this case, would be very significant. As more than one judge has said, the exercise has to be a broad brush one. Quasi-scientific exercises such as that carried out by the parties in relation to the trial timetable are only a starting point.”

In Budgen v Andrew Gardner Partnership [2002] EWCA Civ 1125 the appellant was seeking an issued based order rather than a percentage reduction, a different situation to the one in this case. However, at paragraph 28 Lord Justice Simon Browne stated:

“Of course, as the judge below expressly recognised, he himself was only able to make “a very broad brush” assessment of the costs attributable to the HIS issue. He cannot be forced, however, by the parties’ failure to provide him with more precise information into making an issue-based order and he was not, of course, invited to adjourn for further information.”

Smithkline Beecham plc v Apotex Europe Limited [2004] EWCA Civ 1703 was a patent case and the proportion of costs had to be decided after resolution of the substantive issues and Lord Justice Jacob stated:

“The impossibility of great precision

27.

Before turning to this particular case I should say something about this. Although an issue-by-issue approach is likely to produce a "fairer" answer and is likely to make parties consider carefully before advancing or disputing a particular issue, it should not be thought that it is capable of achieving a "precise" answer. The estimation of costs, like that of valuation of property, is more of an art than a science. True it is that one can measure certain things (such as pages of witness statements or transcript devoted to a particular issue) but they can only be indicia to be taken into account. It would be dangerous to rely upon them as absolutes. Indeed brevity of a document, or a cross-examination, may be the result of great care: was it Hazlitt who apologised for the length of a letter, excusing himself on the grounds that he had not enough time to compose it?

28.

It follows that there is no "precise" figure of costs which, in theory with perfect measurement tools, one could reach. The best that can be achieved is an estimate which is necessarily going to be somewhat crude. The costs in this case are very great, reflecting the much larger sums at stake. We were told the total figure is about £8m for both sides all in (trial, appeal, interlocutory matters). This reflects the much bigger sums at stake for a top-selling pharmaceutical. Mr Watson pointed out that a 1% difference given to one side or the other could amount alone to £80,000. He is right, but that does not mean that anything like an accuracy of 1% can be achieved.”

Mr Sanderson submitted that in relation to the Fresnel lens issue that there was absolutely no evidence that it occupied any significant time before trial. In relation to the other two direct allegations, which were not pursued, he submitted that there was no evidence, at all, that any significant cost was incurred on these issues pre-trial.

Mr Browne submitted that the paragraph 20(l) allegations were made against a haulage company insured by a commercial vehicle insurer; the industry consequences of findings based on those allegations are accepted in the draft judgment. It was therefore a somewhat bold submission by the Claimant to analyse the written evidence to suggest the allegations did not add to the workload. It was a perfectly acceptable approach for the Defendant to take the stance that the Claimant proves her case on these topics. Two allegations were abandoned on the first day of trial. Given that the Fresnel Lens allegation remained alive it was quite obvious that the Defendant incurred time and effort to discredit it, and successfully so. That surely is sufficient evidence for the Court to be satisfied that time and expense was incurred in resisting all the allegations against the company, including those abandoned and the remaining issue contested at trial.

I find it is practicable to make an award of a proportion of the costs. One of the considerations in coming to the appropriate proportion is the amount of trial time that the Fresnel lens occupied. I note in Sycamore calculations relating to the trial timetable were referred to as the ‘starting point.’ I do not view it as appropriate to apply the 17% proportion identified above to the entirety of the Claimant’s costs (any more than I viewed it appropriate to apply the 50% that I had concluded in my draft judgement). The experts had reached agreement on a number of points relating to the other issues in this case. This would therefore have increased the proportion of time occupied by the Fresnel lens issue at trial in comparison to the amount of time/cost it would have incurred in the case overall.

Looking at the 17% of trial costs as a proportion of the total costs claimed gives a figure in the region of 2% (rather than the 8% in the draft judgment) (Footnote: ²). In the same way that it is not appropriate to rely solely in this case on the proportion of trial costs as a measure of the overall costs of this issue it is not appropriate to rely on this percentage either. This will be an underrepresentation of the total costs incurred and adds just over £200 to the proportion of trial costs. It is not realistic to suppose that this is an accurate measure of the costs incurred. What the percentage figures do provide, in this case, is extreme endpoints, in other words the appropriate proportion is likely to lie somewhere between those figures.

Mr Sanderson says there is no evidence upon which to base any assessment of the pre-trial costs of the two abandoned issues. This information is in the Claimant’s control and I note the comment in Budgen. I am not invited to make an issue based order by the Parties, but similar considerations must apply in that I cannot be put in the position of making no award of a proportion on the basis that there is no evidence

Following a trial on liability the Claimant succeeded in her claim against the Defendant, but was unsuccessful in relation to a discrete issue concerning allegations about the failure to have warning equipment fitted on the lorry that collided with her. I have concluded that the Claimant is entitled to recover 90% of her costs from the Defendant, with the 10% difference representing those costs attributable to the allegations on which she was unsuccessful.