TRIAL HAD NOT "COMMENCED" : ADDITIONAL LIABILITY NOT 100%: HIGH COURT DECISION ON COSTS

In James -v- Ireland [2015] EWHC 1259 (QB) Mrs Justice Slade DBE overturned an earlier decision that a trial had commenced and the claimant was entitled to 100% uplift in costs. (The uplift in costs resulted in a sum of about £320,000.)

“The 100% percentage increase is payable when a settlement is reached after the commencement of the final contested hearing, or in this case, contested hearing of the liability issue. It is not triggered by the commencement of any hearing of whatever nature related to the contested liability hearing.”

THE CASE

The issue was whether the trial had “commenced” for the purpose of CPR 45.15. The chronology is important.

1. The hearing of the claim was listed for three days to start on 8 June 2011 before Mr Justice Griffith Williams. The trial of the issue of quantum was adjourned on the first day, 8 June 2011. The issue of liability was stood out on 9 June 2011. The Claim was settled before the next hearing. The question before the Master was whether the trial of the issue of liability had commenced before it was stood out on 9 June 2011. The Master held that the liability trial started on 8 June 2011 after the application to adjourn the issue of quantum was determined.

KEY POINTS

• A trial did not “commence” when an application was made for an adjournment.
• A trial did not “commence” if certain case management hearings and decisions were made.

THE RULES

(6) In this Section –

…

(b) a reference to “trial” is a reference to the final contested hearing or to the contested hearing of any issue ordered to be tried separately;

(c) a reference to a claim concluding at trial is a reference to a claim concluding by settlement after the trial has commenced or by judgment;

…

CPR 45.16 – Subject to rule 45.18, the percentage increase which is to be allowed in relation to solicitors’ fees is-

(a) 100% where the claim concludes at trial; or

(b) 12.5% where –

(i) the claim concludes before a trial has commenced; …

THE JUDGE’S DECISION AS TO THE ISSUE OF WHETHER THE CLAIM HAD CONCLUDED AT TRIAL

1. CPR 45.16(1)(a) and 45.17(1)(a) provide that a 100% uplift in solicitors’ and counsel’s fees are allowed where a CFA has been entered into where the claim concludes at trial. The determination of this appeal turns on whether Master Campbell erred in his interpretation of the meaning of a claim concluding at trial or whether, in deciding that it had, he reached a perverse conclusion on the facts.
2. Mr Justice Griffith Williams granted the application on behalf of the Claimant for the quantum issue to be tried separately and adjourned until after the determination of liability. In my judgment Master Campbell was correct in holding that at that stage the trial had not commenced. The alternative submission by Mr Edwards that if Master Campbell erred in the basis for his decision, that the trial of the liability issue had commenced after the judgment on adjournment of the quantum issue, the trial of the liability issue had commenced when the case was called on and the application for an adjournment of the quantum issue was made cannot be accepted. The final contested hearing or the hearing of an issue ordered to be tried separately does not commence just because the case is called on and counsel have come into court. Whilst a hearing may commence before counsel start making submissions, a ‘trial’ for the purposes of CPR 45.15(6)(b) only starts with the commencement of a final contested hearing or of an issue ordered to be tried separately. On 8 June 2011 a hearing took place but it was not the final contested hearing or the hearing of an issue ordered to be tried separately. The hearing was of an application to adjourn the trial of the issue of quantum. Accordingly the Master did not err in holding that the trial of the issue of liability had not started with the application for an adjournment of issue of quantum.
3. In my judgment it cannot be said that Master Campbell erred in law by failing to refer to the judgment of Master Haworth in Gandy. In Gandy, Master Haworth was considering the wording of a CFA not CPR 45.15(6)(b). Master Haworth distinguished Sitapuria v Khan 10 December 2007and Dahele v Thomas Bates and Son Ltd. [2007] EWHC 90072 (costs) from the case before him on the basis that those cases relate to the question of what constitutes a ‘trial’ for the purposes of Part 45 CPR, the fixed costs regime. Master Haworth stated at paragraph 31:

“I distinguish both those cases from the present case on the basis that the fixed costs regime in Part 45 does not apply to the facts of this case.”

However, whilst not construing the same provision, decisions on the same wording in a similar context are of assistance.

1. Loizou, relied upon by Mr Edwards for the Defendant, was a case decided under CPR 45. In Loizou the First Defendants did not attend. Counsel for the Claimant started the opening of the trial by briefly introducing the parties’ representatives before giving way to counsel for the First Defendant’s application for an adjournment. The application was refused. After a short adjournment, counsel for the First Defendant consented to judgment being entered against him on liability only. Master Leonard held at paragraph 45 that the only options for the First Defendant’s representatives:

“were to proceed in his absence by putting the other parties to proof, or to make an application to the trial judge for adjournment to another date. Either way they had to wait for the contested hearing to commence.”

Master Leonard held that:

“In those circumstances there was no question, as in Gandy, of asking the Learned Recorder to put back the opening of the trial for a short period.”

1. In Gandy Master Haworth held that it was clear from the transcript that counsel for the Claimant was not ready to start and sought an adjournment until 2pm on the day fixed for trial. When counsel returned to court at 2pm the Judge was informed that the parties had compromised the claim. Master Haworth held at paragraph 28 that the trial did not commence on that day.
2. Although each case turns on its own facts and the application to those facts of CPR 45.15(6)(b), those of the appeal before me bear striking similarities with those in Gandy.
3. Whilst, as in Gandy, the Judge had read some of the papers and witnesses were present, the Claimant’s counsel was not ready to proceed. The hearing was put back by consent, first to 10.30am on 9 June and then to 2pm. It was then stood out of the list.
4. In my judgment what occurred after Mr Justice Griffith Williams had delivered his judgment on the adjournment of the remedy issue was that the trial of the liability issue was put back in circumstances in which the Claimant’s representatives had to have the opportunity to consider a late disclosed statement by the Defendant to a police officer. When it became apparent from the statement that there was an independent witness to the accident, time was given to ascertain whether and when a statement from him could be obtained. When the hearing resumed on the morning of 9 June both counsel asked for an adjournment until 2pm in the light of the possibility of further witness statements from Mr Delbridge and Mrs Ireland and a statement from Mr Small being obtained. When the court resumed at 2pm, a statement from Mr Small had not yet been obtained. Counsel hoped it would be available by the end of the day but it would have to be considered by the legal representatives and the experts. Mr Wilson-Smith QC asked the judge to stand the case out. The court was only going to sit until midday the next day. Mr Norris QC acknowledged that time constraints caused difficulties. In my judgment these steps cannot be said to constitute the commencement of the trial of the liability issue. The fact that the case had been called on, counsel had come into court and the Judge had listened to submissions on whether he should rise until the next morning do not in my judgment support a conclusion that the trial on the liability issue had started in the afternoon of 8 June.
5. The question then arises as to whether the trial had started at 10.30am on 8 June, the alternative basis on which the Defendant seeks to uphold the decision of Master Campbell. Master Campbell held that Mr Wilson-Smith QC’s opening of the liability issue had effectively been advanced during the application for an adjournment of the trial of the remedy issue. At the beginning of the hearing on the first day, 8 June 2011, Mr Wilson-Smith QC told Mr Justice Griffith Williams that the liability issue was restricted to contributory negligence. However it is clear from the exchanges between the Judge and Mr Norris QC when the case was stood out of the list at the end of the second day, 9 June 2011, that the Judge did not know the scope of the contributory negligence defence which was the main issue in the liability trial. From the transcript of proceedings it is apparent that counsel for the Claimant had not opened the case on the liability issues when applying for an adjournment of the quantum hearing. Submissions were made on evidence about the care regime which would be needed for the Claimant. Discussions about the Claimant’s helmet which may have been relevant to the liability hearing did not take place until after the judgment had been given to adjourn the trial of the quantum issue. In my judgment the transcript of proceedings does not support a conclusion that the liability trial had effectively been opened by Mr Wilson-Smith QC’s submission in applying for an adjournment of the trial of the quantum issue.
6. Nor, in my judgment, did Mr Justice Griffith Williams’ asking what he should read overnight indicate that the liability trial had started. No doubt counsel and Judge wanted to make the best use of time in the hope that it may have been possible to start the liability trial the next day. This proved not to have been possible. The reading of papers does not indicate that the liability trial had started.
7. Further, there is considerable force in Mr Arney’s submission that the fact that Mr Justice Griffith Williams was asked to and did reserve the liability trial to himself is a strong indication that the liability trial had not commenced. There would have been no need to reserve the case to himself if the Judge had already started hearing the liability trial. He would have conducted an adjourned hearing. No order reserving the case to himself would have been necessary or appropriate. Further, if the liability trial had commenced it would have been adjourned. The liability trial was not adjourned, it was stood out of the list because the liability trial had not commenced.
8. The 100% percentage increase is payable when a settlement is reached after the commencement of the final contested hearing, or in this case, contested hearing of the liability issue. It is not triggered by the commencement of any hearing of whatever nature related to the contested liability hearing. In this case there may be hearings before the start of the contested hearing of the liability issue to deal with evidence and other case management matters. Whilst the hearing before Mr Justice Griffith Williams which started after his judgment on the adjournment of the quantum issue was related to the trial of the liability issue, it was to put back the start of the hearing of that issue and then to take it out of the list. The hearing which took place from the afternoon of 8 June and on 9 June 2011 was not the contested hearing of the liability issue within the meaning of CPR 45.15(6)(b). The sequential proposals to put the case back, first to 10.30am on 9 June 2011 and then to 2pm on that day were analogous to the facts considered in Gandy. Whilst such requests can be made after a trial has started, that was not so in this case. In my judgment Master Campbell erred in treating the start of a hearing related to the liability issue concerned with when the trial would start as the start of the contested hearing of that issue.
9. The appeal is allowed. In my judgment on the material in the transcript of proceedings on 8 and 9 June 2011, and applying CPR 45.15(6)(b), the only conclusion which could be reached is that the trial of the liability issue had not commenced on 8 or 9 June 2011. Accordingly the claim for a 100% increase in solicitor’s and barrister’s fees is dismissed. Counsel are invited to calculate the consequential increase in fees.
10. I am grateful for the assistance given by the practical experience of the Assessor, Master Haworth but this judgment is mine alone.