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R v Barts Health NHS Trust - What costs are recoverable when you have been awarded the costs of one action that was heard with another

Several issues were considered by Master Rowley in R v Barts Health NHS Trust [2022] EWHC B3 (Costs).  Part One of our summary of this case looks at “what costs are recoverable when you have been awarded the costs of one action that was heard with another, but not the other action”.

Amongst other issues, this was considered by Master Rowley in R v Barts Health NHS Trust [2022] EWHC B3 (Costs).  The Defendant had been ordered to pay the Claimant 80% of her costs in the judicial review proceedings but there was no order as to costs made between the parties for the proceedings under the Children Act 1989.

The Claimant (who brought the proceedings through her litigation friend) had sustained a severe brain injury that resulted in her requiring full-time care at the Paediatric Intensive Care Unit. The treating doctors were of the view that treatment ought to be withdrawn and only palliative care given.  Her parents did not agree and sought a transfer to the Gaslini Hospital, which was refused, and the judicial review was brought against that decision.  The Trust, being the Defendant in the judicial review, issued proceedings under the Children Act 1989 to determine the best interests of the Claimant.  The cases were heard concurrently, but not consolidated, and a combined judgment was given.

The Claimant submitted a bill of costs which the Defendant challenged on the basis that the work done and disbursements incurred (particularly those of Counsel) related, at least in part, to the Children Act proceedings and were not recoverable.  This argument was grounded on reliance upon the decision in Medway Oil and Storage Co Ltd v Continental Contractors Ltd [1929] AC 88, the paying party arguing this meant that only the costs which are over and above those which would be incurred in the Children Act proceedings anyway may be recovered – with it argued that the judicial review was subservient to the Children Act proceedings.   The Claimant asserted that the judicial review proceedings were at least as important as the Children Act proceedings.

The Costs Judge noted that the litigation friend and solicitors in the judicial review were separate, with the litigation friend not representing the Claimant in the Children Act proceedings.  To the extent that the litigation friend was a Respondent in the Children Act proceedings she represented herself, not the Claimant.  He commented that:

“It seems to me that the sort of case where Medway Oil applies requires the same parties to be involved in a claim and counterclaim (or possibly more than one set of proceedings involving the same parties) representing themselves. There is a third option where one party has the costs of the action but the other has the cost of a particular issue or issues but that adds nothing to the point. In this sort of case, the pragmatic decision in Medway Oil leads to the claimant receiving their costs and the defendant only receiving a limited amount by comparison for the counterclaim. The harshness that the “Medway Oil” approach can occasion can be reduced by a special direction of the court if it is asked to do so.”

The Court, based on the facts, held that Medway Oil and related authorities, did not apply.  The dispute started on the wrong basis, the correct approach was to consider whether the costs were individual to the specific proceedings, or “common”, and treated appropriately.  This is straightforward for individual type costs (being recoverable for the judicial review here and not for the Children Act proceedings).  The treatment of “common” costs is always a thorny issue, and a problematic matter to determine, the Master commenting that his experience was that common costs were rarely non-divisible and “it is extremely time consuming to contemplate each attendance note or other documentation in order to come to a conclusion on where to divide each piece of work”, but that said “there is little for it but to consider each item that is claimed.” 

In such a situation the court should not proceed on a blanket approach to the division of such common costs, with there being further material lodged with the Master upon which he commented upon and found there was some substance to the Defendant’s point in that there was time which required division.  An example was cited of costs relating to a Position Statement for the Children Act proceedings that were claimed, and for another item “to the extent that it does, it is not clear whether any account has been taken in the fee claimed in the bill to reflect consideration of evidence that was only pertinent to the Children Act application”.

There is good reason that CPR 44.2(7) warns against the making of costs awards based on part of the proceedings (or on an issues basis), but they are not uncommon and can’t be avoided in some cases so problems such as those seen in the case under consideration often arise.  In these cases, it is essential to instruct a costs expert in such issues, and the detail of the work done is so important.  Master Rowley observed:

It is, and always has been, for the receiving party to draft the bill of costs to reflect any necessary division of the work that has been done. There is no realistic way, absent the receiving party’s file, for the paying party to be able to interpret the time claimed in order to be able to challenge items in the bill in the fashion contended for by the claimant. If that division has not been carried out, bills are regularly returned in order for them to be redrawn. Where, as here, the receiving party argues that it is not required, then it will have the effect of the court receiving more speculative arguments from the paying party and being required to spend longer on each entry before reaching a decision.”

Getting the approach wrong can be very costly for a receiving party, given the onus upon them to draft the bill of costs to reflect any necessary division.  We regularly deal with such costs for both receiving and paying parties.  Please do get in touch to prevent potential problems and additional costs resulting from an incorrect approach being taken.

If you require any assistance with your legal costs requirements, please do get in touch with the team on 01733 350 880, or by email mail@aandmbacon.co.uk. For more information please do visit our website www.aandmbacon.co.uk.

Published 27 January 2022

Author – Caroline Cousins

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