CXS v Maidstone and Tunbridge Wells NHS Trust  EWHC 14 (KB)
Issue – The first issue was the Claimant’s application for a further interim payment on account of costs and the second issue was the Defendant’s application for a costs management order.
Background – The claim relates to a clinical negligence matter resulting in the Claimant suffering from cerebral palsy. Proceedings were issued in 2019. Liability for the claim was admitted in full. At a CMC on the 25 June 2020, Master Cook made an order staying the claim until 5 September 2022. It was agreed between the parties that the claim would be stayed further until 6 September 2027 when the Claimant would be 12 years of age.
Arguments – On consideration of the expert evidence obtained during the previous stay, it was clear to Master Cook that the case was complex with significant uncertainty. Interim payments on account of damages totalling £950,000 had been made by the Defendant to date. In terms of interim payments on account of costs, costs to date were £1,155,262 and four payments on account of costs totalling £480,000 had been made. The Claimant’s application was for a further £325,000 which would take the total paid on account to £805,000, approximately 70% of the costs incurred to date. This was opposed by the Defendant.
Master Cook referenced the “established principles” as summarised in the judgment of Christopher Clarke LJ in the case Excaliber Ventures LLC v Texas Keystone  EWHC 566 (Comm):
Firstly, it is wrong to approach the question of a reasonable amount on account as being a test as to the “irreducible minimum” to be recovered on detailed assessment, it should simply be a “reasonable sum”.
Secondly, a “reasonable sum” would often be one that was an estimate of the likely level of recovery subject, to an appropriate margin to allow for error in the estimation.
Thirdly, in determining whether to order any payment on account and its amount, the court should take into account all the relevant factors, “including the likelihood (if it can be assessed) of the claimants being awarded the costs that they seek or a lesser and if so what proportion of them; the difficulty, if any, that may be faced in recovering those costs; the likelihood of a successful appeal; the means of the parties; the imminence of any assessment; any relevant delay and whether the paying party will have any difficulty in recovery in the case of any overpayment”.
In making submissions for the Claimant, the Claimant drew on the value of the claim, the complexity in terms of the number of experts, the number of issues to be addressed by the experts and the Claimant’s parents’ difficulty trusting any medical professionals.
On behalf of the Defendant, the point was made that the costs incurred to date were significant by any standards. The Defendant Counsel also drew on the level of the hourly rates sought by the Claimant for the Partner at £530 per hour.
Whilst the Defendant accepted that CPR 3.12 (c) excluded claims made on or behalf of a person under the age of 18 from costs management, the Defendant also made the submission that if the claim was to be stayed for a further five years it is reasonable that there be an order requiring the parties to file and exchange costs budgets with a view to a costs management order being made by the court so as to ensure that the case was dealt with justly and at proportionate cost in accordance with the overriding objective.
In the circumstances the Defendant invited Master Cook to make a costs management order limited to the duration of the stay namely to 6 September 2027 rather than to make any further interim payment on account of costs.
The Claimant briefly responded that whilst the court had discretion to apply costs management to this claim, it would be wholly inappropriate on the facts of the case.
Judgement – Master Cook took the view that that the costs incurred to date were high when comparing with other similar cases with budgets through to Trial totalling around £750,000-£1.5m however it was accepted that this case was different in respect of the timeframes between issue and the first CCMC (4 years) with a further 5 years before the next CMC. Master Cook also accepted there was still a significant amount more work to be carried out by the Claimant solicitor.
Master Cook concluded that it would not be appropriate to make a CMO limited to the period of the stay as suggested by the Defendant as it was quite clear in the rules that cases involving minors take many years to establish the full extent of injuries and prognosis and thus this case fell well within the type of cases that the CPR intended to exempt from costs management.
With regards to the level of interim payment on account of costs, Master Cook considered the Claimant’s position largely arguing reasonableness on the basis of a percentage and felt the level of interims already paid, were reasonable. Master Cook did not accept that the percentage application was appropriate given his concerns with the level of costs incurred to date. Master Cook did not accept that any consideration of likely future costs could be made. A further £80,000 interim payment on account of costs was awarded bringing the total amount of interim payments to £560,000.
Master Cook did however comment that ‘this would seem to be an appropriate case for the parties to produce costs estimates in advance of the CMC which will take place in September 2027’.
Commentary – This decision highlights a number of points:
- That in significant cases which are not likely to be concluded for some time that consideration should be given to applying for an interim on account of costs and that this case gives clear guidance as to the principles likely to be considered.
- The level of interim payments to be awarded has a direct link to the reasonableness of the costs to date.
- It also underlines the fact that it is likely to be an uphill struggle to apply cost management on a case that falls under the exemptions as outlined in CPR 3.12(1).