WHEN SHOULD A PART 20 DEFENDANT BE LIABLE TO PAY THE PART 20 CLAIMANT’S COSTS OF DEFENDING THE MAIN ACTION? THE PRINCIPLES CONSIDERED

In Alison Healey (Widow And Executrix of the Estate of Simon Andrew Healey, Deceased) v Mr Daniel McgRath [2024] EWHC 1360 (KB) Dexter Dias KC, sitting as a Deputy High Court Judge, considered the question of whether it was appropriate for a Part 20 defendant to pay, or contribute towards, the part 20 claimant’s costs of defending the main action.  The liability to pay the costs of defending the main action is not automatic. The relevant factors were considered before the judge decided that the Part 20 defendant should contribute one-third of the Part 20 claimant’s costs of defending the main action. (This is not to be confused with the Part 20 defendant’s liability to pay the Part 20 claimant’s costs of the Part 20 proceedings – there was a liability to pay 100% of those costs).

“I assess that the fair contribution to Ramsay’s own main claim costs that Mr McGrath should pay is one third.”

THE CASE

The claimant brought an action under the Fatal Accidents Act, alleging  that negligence on the part of the first defendant doctor and the second defendant health company caused the death of her husband.

The main action was compromised and the second defendant  (Part 20 claimant) sought a contribution from the first defendant doctor (Part 20 defendant).

THE DOCTOR’S CONDUCT DURING THE ACTION

The solicitors acting for the doctor had come off record in November 2022.  He had then not engaged in the proceedings. The judge found that the doctor should contribute 75% of the damages.

CONTRIBUTING TOWARDS THE PART 20 CLAIMANT’S COSTS OF DEFENDING THE ACTION

1. 1. Since 17 November 2022, when his former solicitors came off the record with the court’s approval, Mr McGrath has appeared in person in the main claim and the Part 20 proceedings. However, he failed to attend the trial of the contribution proceedings before this court on 17 April 2024. That is the latest act in a course of non-engaging conduct by him. He also failed to file any lay or expert evidence in the Part 20 proceedings (although he did file a statement in main proceedings in May 2022); failed to file a skeleton argument; and failed to engage at all with the Ramsay’s solicitors following a listing for summary judgment before HHJ Robinson on 29 January 2024. I find no possible basis not to proceed with the Part 20 trial and have received no submissions making such an application. Further, I have considered carefully such aspects of Mr McGrath’s case as I could determine them, given his almost wholesale failure to participate. I sought submissions from Mr Weitzman in particular on issues of the causative contribution of nursing staff failures (and thus second defendant’s contribution) to Mr Healey’s death. I also pressed Mr Weitzman on aspects of his costs submissions. Given Mr McGrath’s refusal to engage, the court faced a formidable obstacle to explore Mr McGrath’s case beyond this.

1. Despite his absence and non-engagement, I judge it important in the public interest, and especially as a courtesy to Mrs Healey and her children, who may wish to know what has happened in further proceedings resulting from Mr Healey’s death, to provide a judgment for the record setting out the court’s thinking in reaching the conclusions it has.

THE SECOND DEFENDANT’S CLAIM FOR ITS OWN COST OF DEFENDING THE MAIN CLAIM

This issue is less straightforward there is no presumption that a Part 20 defendant pay the Part 20 claimant’s costs of defending the main action.

1. 1. Ramsay seeks an order that Mr McGrath pay a proportion of its costs in defending the main claim. Ramsay submits that the appropriate proportion is 75%. This issue, as distinct from the costs payable to the claimant and costs recoverable from contribution proceedings, was considered by this court in Mouchel Ltd. v Van Oord (UK) Ltd (No.2) [2011] PNLR 26 at 535-50, (see particularly [53]-[60]). The facts of that case need brief exposition for the decision of the court to be properly understood.

1. 1. The dispute was about the construction of a power station in Lincolnshire that had gone wrong. Kier (“K”) subcontracted to the parties. M provided advice; VO’s role was construction. There were two principal breaches of duty by M (1) using unsuitable sand; (2) the placement of scour rock around water cooling structures. VO was only involved in the second breach. Using approximate figures, M settled with K in the sum £100,000 damages; interest was £18,000; litigation costs et cetera £400,000. Only £24,000 of the £100,000 damages was attributable to the scour rock (second breach). Of that, VO’s contribution was 35%. Thus, VO was liable for £8,500 in damages. VO was not involved in the main proceedings until very late.

1. 1. The case was heard by Ramsey J. He concluded that there was a discretionary power to order a defendant’s costs defending the main action, not under the CLCA but under the general s.51 SCA discretion. His reasoning was as follows:

“53 The provisions of the 1978 Act make it clear that what is being granted is a right to contribute in respect of a party’s liability to a third party. As set out above that liability can include liability to that third party for costs. However, I see no grounds upon which a party can seek a contribution in relation to its own costs because that does not form a liability to a third party in respect of damage. It is a liability of the party itself in relation to proceedings brought by the third party, but that does not make it a liability to the third party for damage. In those circumstances I do not consider that there is a claim by Mouchel under the 1978 Act for the costs that Mouchel incurred in the main action.

54 There is however, it is common ground, a general discretion under ss.51(1) and 51(3) of the 1981 Act and if there is any claim by Mouchel for costs against Van Oord I consider it has to establish that claim under those provisions.

55 In cases where the third party proceedings consist of a claim which is passed through to the third party, then depending on the outcome of the third party proceedings, if the third party is liable to a defendant and the defendant is liable to the claimant then the third party may have a liability to pay the defendant’s costs which would include costs which the defendant had incurred in defending the claim by the claimant.

57 As is clear from the issues between Mouchel and Kier they were confined to issues relating to Mouchel’s liability to Kier, rather than anything to do with primary liability of Van Oord to Kier. Indeed in this case Van Oord was not involved in the proceedings until a late stage in June 2008. In those circumstances I find it difficult to see the basis upon which the court should exercise its discretion and make an order that Van Oord should contribute to Mouchel’s costs in defending proceedings to establish Mouchel’s liability, in such circumstances.

58 In terms of CPR r.44.3(2) the court would generally follow the rule that the unsuccessful party will be ordered to pay the costs of the successful party. In the context of contribution proceedings, that rule applies as between Van Oord and Mouchel in respect of the costs of the third party proceedings. But it is difficult to see how, by Mouchel incurring costs in defending the claims by Kier up to the time of settlement, it can be said that the costs of Mouchel should be borne by Van Oord as being the unsuccessful party.

59 Equally considering the matters to which the court has to have regard under CPR r.44.3(4) I find it difficult to see that there are circumstances in this case which would lead to it being just to make an order that Van Oord should pay some of Mouchel’s costs. There does not appear to me to be any conduct by Van Oord to justify such an order. And this is borne out by considering the various matters included as conduct in CPR r.44.3(5). The fact is that Van Oord were not involved until very late in the main action and then by way of contribution proceedings and I do not see that there is anything in that conduct which justifies making an order that Van Oord should pay some of Mouchel’s costs. In particular, in the context where Van Oord’s overall liability to contribute is only a small percentage of the overall settlement so that it cannot have been a material factor in Mouchel deciding whether to settle or not and where the costs of the third party proceedings will reflect matters as between Van Oord and Mouchel, I do not consider that it is appropriate to exercise my discretion and award Mouchel a contribution for its costs of defending the claim by Kier.”

1. 1. Ultimately, the judge refused to grant the order applied for. That was a fact-specific decision, based on the late involvement of VO and its limited contribution to the breaches of duty that resulted in the overall level of damages. The judge proceeded to state at [60]:

“Whilst there might be cases which would make it just for a contributing party to make payment of some of the other party’s costs of defending proceedings against a third party, there is nothing in this case to suggest that this is appropriate here.”

1. 1. Therefore, the decision leaves open the possibility of cases where it would be appropriate to exercise the discretion in favour of such a defendant. Is Ramsay Health Care one such defendant who should be entitled to a contribution in costs from Mr McGrath in respect of the main claim? There are a number of relevant matters, involving the nature of the claims and the conduct of parties, both relevant CPR factors:

(1) Mr McGrath was involved from the start as the surgeon in charge of Mr Healey’s treatment;

(2) The role of the nursing staff for whom Ramsay is liable is very much subordinate to Mr McGrath. He devised the treatment plan. They could not. They were entitled to rely upon his experience and expertise to arrange a safe treatment pathway for Mr Healey. But Mr McGrath did not do that and his failures were the substantial contributory cause of Mr Healey’s death;

(3) While Ramsay was realistic enough to compromise the claim brought by Mrs Healey, Mr McGrath did not. That is why Ramsay brought contribution proceedings.

(4) Having reviewed the papers carefully, and especially in light of the expert evidence from Mr Cundall and Professor Schofield, it is difficult to understand how Mr McGrath’s defence was tenable. In fact, it was fundamentally flawed;

(5) His failure to compromise the main claim with Mrs Healey mirrored closely his limited engagement in the contribution proceedings leading to summary judgment being entered. Thereafter his almost complete non-participation culminated in his failure to attend trial. While this latter conduct relates to the Part 20 proceedings, it reveals a course of conduct by Mr McGrath that is unsatisfactory, unrealistic and uncooperative.

(6) The apportionment levels in this case are markedly different from Mouchel. There VO was liable for approximately 8.5% of damages, limited to a lesser breach of duty. In this case, Mr McGrath is liable for 75% of damages and his conduct and negligent failures were the principal causative element leading to death.

1. 1. Under the SCA, the court has a necessarily wide discretion. I conclude that for these reasons, it is just for Mr McGrath to contribute to Ramsay’s costs of defending the main claim. On one view, Ramsay is 100% responsible for its own negligence. But I regard that as too simplistic a characterisation in this case, and one that is unfair to Ramsay. Its nursing staff were heavily dependent on Mr McGrath’s expertise, experience and medical leadership. His negligence set in train a sequence of ultimately catastrophic events. I judge that it is just for Mr McGrath in these specific circumstances to make a contribution to Ramsay’s costs. I find that the 75% contribution claimed is excessive and disproportionate. Mr Weitzman in his submissions realistically observes that the court may feel in its discretion appropriate to award a lesser proportion. It does. On what is before the court, I assess that the fair contribution to Ramsay’s own main claim costs that Mr McGrath should pay is one third. That takes into account that Ramsay’s negligence did not occur in a vacuum, but arose as a result of circumstances initially caused by Mr McGrath’s serious and ongoing breaches of duty. Chiefly, Ramsay’s staff members failed to respond to the results of Mr McGrath’s negligence in the ways that Ms Botting has identified.

1. 1. 1. The question then becomes what is the just proportion. I step back and look at the overall picture. In doing so, I also look ahead to Issue 5 and weigh that the court will also grant Ramsay’s application for its Part 20 costs. The global picture is that Mr McGrath must make a 75% contribution to damages; he must pay 75% of the claimant’s costs and 100% of Ramsay’s Part 20 costs. In those global circumstances, the fair proportion of Ramsay’s main claim costs Mr McGrath should pay is one third.

§X. Issue 5: Ramsay’s Part 20 costs

1. In the Part 20 contribution claim, Ramsay is the successful party and Mr McGrath is the unsuccessful party. There is no reason not to follow the general rule that costs follow the event. Mr McGrath must pay Ramsay’s costs to be assessed on a standard basis if not agreed.