COST BITES 17: FAILURE TO ENGAGE WITH CRITICISM OF WITNESS STATEMENT LEADS TO INDEMNITY COSTS: FAILING TO ENGAGE ON WITNESS STATEMENT ISSUES CAN BE EXPENSIVE

There is another judgment of the judgment in McKinney Plant & Safety Ltd v Construction Industry Training Board [2022] EWHC 2361 (Ch) Richard Farnhill (sitting as a Deputy Judge of the Chancery Division) that is worth noting.  The claimant’s failure to identify the breaches of the rules in a witness statement, coupled with the failure to engage with the defendant on this issue, led to an order for indemnity costs.

In my view the seriousness of the breach and the Claimant’s refusal to engage with it until I raised the point does take this case well outside the norm and does merit an award of indemnity costs”

THE CASE

The claimant had filed a witness statement that was deficient in that it did not comply with PD 57AC.  In response to the defendant’s criticism, the claimant’s solicitors replied

 “it is possible that at some points that evidence may have strayed the wrong side of the strict wording PD57AC, we respectfully suggest that your criticisms do, largely, fall into the category of nit-picking”

However the judge took the point in relation to the claimant’s witness statement at a PTR and ordered that the parties file submissions.  The claimant then served a highly revised statement which largely complied with the Practice Direction.  The judge gave permission to rely on that statement. The judge then considered the issue of costs.

THE JUDGMENT ON COSTS

The judge held that costs should be payable immediately, on an indemnity basis given the claimant’s conduct.

    1. The Claimant suggests that I should leave the question of costs to be dealt with by the trial judge. I disagree. This was a freestanding issue, and my objective in having it addressed now was to avoid the need for the trial judge to have to do so.
    1. For its part the Defendant seeks costs on the indemnity basis, to be summarily assessed in the sum of £9,910.50 plus VAT.
    1. It seems to me that the following factors are relevant:
i) The breach of PD 57AC was a serious one. The Claimant now accepts, in my view rightly, that the overwhelming majority of McKinney 2 needed to be deleted or amended.
ii) The Defendant set out its concerns in considerable detail by, at the latest, early June. The Claimant failed to engage until 22 July, a matter of days before the PTR. That effectively precluded any meaningful discussion of the issues.
iii) The position was aggravated by the Claimant’s dismissive approach. Given the scale of the ultimate changes, the Claimant’s suggestion that the Defendant was “nit-picking” was plainly wrong.
iv) It was further aggravated by the Claimant’s attempt to suggest that it did not understand the Defendant’s concerns. In their 22 July letter, Doyle Clayton required that the Defendant “set out the precise contravention, cross referencing it to an accurate quotation of the part of PD57AC relied upon“. That request was baseless. After I raised the issue at the PTR, with no further guidance the Claimant and its legal advisors were able to identify necessary changes and deletions to 95 of the 102 paragraphs of McKinney 2.
v) Set against that is the fact that this was a point ultimately taken by me rather than the Defendant. That seems to me a minor point. Faced with a flat refusal by the Claimant to engage, delivered shortly before the PTR, the fact that the Defendant elected not to pursue the issue is of limited significance.
    1. In my view the seriousness of the breach and the Claimant’s refusal to engage with it until I raised the point does take this case well outside the norm and does merit an award of indemnity costs.
  1. The Defendant has provided a summary assessment of its costs. I note that Ms Packman KC has apportioned her time for attending the PTR hearing to reflect the fact that only part of it was spent addressing this issue. However, her instructing solicitors do not seem to have reduced their costs. Applying the same apportionment results in a discount of £322.50, for a total of £9,588. I consider the costs otherwise to be reasonable.