Burrows v Vauxhall Motors Ltd 1997
- Reported: [1997] EWCA Civ 2756
- Year: 1997
- Court: Court of Appeal
FACTS:
The plaintiff was injured on 22 June 1993 in the course of his employment. The plaintiff’s solicitors sent a letter before action to the defendant, the plaintiff’s employer on 22 March 1994. On 3 October 1994 the defendant’s insurers wrote to the plaintiff’s solicitors stating that “Having made further enquires with our Insured, we can confirm that, based on the information currently available to us, your clients claim has a settlement value. We accordingly await a medical report on your client’s injury, to enable this matter to proceed towards an amicable settlement.” The defendant’s insurers needed to explore the possibility of settlement of claims before the costs of litigation were incurred.
On 15 October 1994, the plaintiff was examined by a consultant instructed on his behalf. The consultants report, dated 29 October 1994, was sent to his solicitors. The report was not sent to the defendant or to the insurers at that stage.
On 5 May 1995 without any further correspondence the plaintiff’s solicitors issued a summons claiming damages for personal injury. A copy of the plaintiff’s medical report was served with that summons. On 22 May 1995 the defendant served a defence admitting liability but making no admissions as to the extent of the plaintiff’s injuries. On 8 June 1995 the defendant made payment into Court in the amount of £1,500. That was not accepted. On 17 August 1995 the plaintiff was examined by a consultant instructed on behalf of the defendant. On 23 November 1995 the defendant made a further payment in, increasing the amount to £2,250. On 6 December 1995, within the 21 day period limited by Ord 11 r 3(1) CCR, that payment was accepted by the plaintiff.
On 8 January 1996 the defendant applied to the County Court for an order limiting the defendant’s liability for the plaintiff’s costs “to a period as determined by the Court. Such costs to exclude any costs incurred by the Plaintiff in issuing and serving proceedings on the Defendants.” The application sought an order that the plaintiff pays the defendant’s costs on the basis that the costs of commencing and defending the proceedings were “unnecessarily incurred”.
The application went before the district judge on 9 February 1996. The insurers argued that the plaintiff acted unreasonably in commencing proceedings by the issue of a summons in the County Court before they had had a proper opportunity to make an offer of settlement based on the medical report which the plaintiff’s advisers had obtained. Once the medical report had been received the defendant made a payment into Court which the plaintiff did accept.
The district judge ordered that there be no order as to the plaintiff’s costs prior to 8 June 1995 (the date of the first payment) but that the plaintiff’s costs thereafter should be paid by the defendant, to be taxed if not agreed by scale 1. The plaintiff appealed to the County Court Judge and then appealed to the Court of Appeal.
HELD:
The appeal in the County Court was heard by His Honour Judge Sumner, the written judgement was delivered on 29 July 1996. The Judge held that Ord 62 r 10 RSC was an element to be described as “a refinement” of a more general discretion in relation to entitlement to costs. He was satisfied, in the light of the decision of the Court of Appeal in Medisure Marketing and Management Limited v Woolven (unreported, 9 November 1994), that the general discretion in relation to entitlement was excluded by the provisions in Ord 11 r 3 CCR. Accordingly, he held that the County Court had no jurisdiction to make the order sought by the defendant’s application of 8 January 1996 and set aside the order made by the District Judge.
The Court of Appeal agreed and took the view that the County Court had no power to make the order sought and on the effect of Ord 62 r 28(1) RSC. The defendant was allowed the opportunity to argue on taxation, that the district judge as taxing officer should exercise his powers under Ord 62 r 28(1) RSC to disallow all or part of the plaintiff’s costs and to require that the plaintiff pay some or all of the defendant’s costs.
Judge Sumner concluded his judgement by stating: “I have been given no reason for the non-disclosure of the medical report nor the lack of notification of the additional claims. It is not said to be an oversight or error. I am satisfied that to start proceedings in this way after withholding plainly relevant medical information and prevent an offer of settlement by insurers willing to negotiate is misconduct within Order 62 rule 10. To announce further claims in Particulars of Claim without prior notification and any sufficient means of assessing their validity is likewise misconduct.”
Lord Woolf MR held that the costs which may be disallowed are costs ‘in respect of the act or omission’ which had been done or made unreasonably. It could not be said that it was unreasonable for the plaintiff to obtain a medical report in October 1994. The unreasonable conduct (if any) had taken place after the report had been obtained. If, therefore, the cost of obtaining the medical report would otherwise be allowed on taxation as a proper pre-litigation expense, it should not be disallowed under the powers in rr 10(1) and 28(1) of Ord 62 RSC. If application is made under r 28(1) in the course the taxation of the plaintiff’s costs in this case, it will be for the district judge, as taxing officer, to consider afresh what items can truly be said to have been unnecessarily incurred as a result of the act or omission which he holds to have been unreasonable.
Lord Woolf MR concluded that in relation to the order for costs made in the County Court “The judge explained why he was making the special order which he did, and we can see no reason for interfering with that order. First, the judge had to look into the merits of the matter and the views that he expressed on the merits of the matter will be of value when it comes to the question of taxing costs. Secondly, in the court below no point had been taken as to jurisdiction. The fact that the district judge reached the decision that he did, meant that it had to go before the judge.”
Related posts:
