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Can you have your cake and eat it when considering who should pay costs?

In Bailey and Others v GlaxoSmithKline UK Ltd [2020] EWHC 1766 (QB), Mrs Justice Lambert considered the general rule that the unsuccessful party should pay the costs of the action, as per CPR 44.2(2)(a).

The main action had been for damages for a personal injury in respect of an antidepressant known as Seroxat. The Claimants were test Claimants who alleged that the Seroxat supplied by the Defendant was harmful. The action commenced in 2008 (before the qualified one-way costs regime “QOCS” had been introduced) and had been stayed until 2015. At the trial, the action was adjourned in order that the Claimants could appeal a finding that the Claimants’ pleadings did not enable it to run wider arguments. The Claimants’ appeal was unsuccessful, and the Claimants consented to Judgment being entered for the Defendant.

The Claimants argued that they should not have to pay the Defendant’s costs on the basis that neither party complied with the overriding objective and their (being the Claimants’) case was so “flawed and not legally tenable” that the Defendant should have applied for summary judgment and / or to strike it out. The Claimants also submitted that their liability for costs should be limited to any costs associated with the strike out.

Mrs Justice Lambert rejected the Claimants’ submissions and held that the Claimants should pay costs;

I have no difficulty in concluding that, in this case, the general rule should apply and there should be an order that the Claimants bear the costs of the Defendant. I reach this conclusion for the three main reasons advanced by Mr Sheehan.”

The first reason being the principle of duty and that the duty to run the Claimants’ case rests on the Claimant and the Claimants’ legal team. The Claimants, throughout the case, had the benefit of relying on Counsel and Solicitors and therefore it was the responsibility of the Claimants’ legal team to evaluate (and re-evaluate) the merits of the action.

The second reason advanced relates to authority and that there is no authority that the Defendant should be penalised for failing to make an application for summary disposal of a weak claim.

The third and final reason relates to the Claimants’ position and attitude throughout the claim. The Claimants’ always maintained that the action should proceed to trial and thus even when the Court of Appeal judgment was handed down, the Claimants’ maintained that the claim remained arguable.

Further, Mrs Justice Lambert held that the costs should be paid on the indemnity basis from the date on which it became apparent that the case had become speculative and weak.

Finally, it was ordered that a rather large payment on account be made – in the sum of £4.5 million. The Defendant originally sought £5 million by way of a payment on account as per CPR 44.2(8), but Mrs Justice Lambert felt that £4.5 million was a reasonable sum in the context of the claim. Afterall, the Defendant’s Schedule of Costs totaled £9.33 million.

This case, as Mr Sheehan QC (Counsel for the Defendant) submits, is an “application by the Claimant’s to have their cake and it” and it seems that such an application has now put the Claimants’ in a spot of bother.

A&M Bacon Ltd have a wealth of knowledge in dealing with costs claims, whether the sum is modest or in the millions. You can be sure that A&M Bacon is here for all your costing needs, both big and small

 

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