Brexit 1986: what would the Daily Mail have called the judges?
The end of a year is always a useful time to reflect upon cases which have been decided in the previous twelve months. Once again there has been an abundance of costs decisions and we have had no difficulty finding sufficient judgments at High Court level and above to include in Costs Law Reports and Costs Law Reports Online. We even published a “bonus” online edition containing decisions of interest at costs judge level, some of which will be the subject of appeals during 2017. More of that next month.
At the moment that your co-editors are wielding their pens for the last time in 2016, the Supreme Court has just begun to hear the appeal in Brexit: for purists, the case is called R (Miller and Another) v Secretary of State for Exiting the European Union. After the furore which followed the decision of the Divisional Court –  EWHC 2768 (Admin) (Thomas CJ, Etherton MR and Sales LJ) – when the Daily Mail described the three judges as “Enemies of the People” in a blazing front page, the backlash has been surprisingly favourable in support of the judiciary. “Drippy” was the description given by the Times to the Lord Chancellor, Liz Truss, following her failure to say anything to support the independence of the judiciary until nearly 48 hours had elapsed after publication of the Mail’s banner headline. Even then, what she said was just that, drippy.
“Truss may have broken the law in failing to defend Brexit Judges,” the Thunderer continued when carrying an interview with retired Lord Chief Justice, Lord Judge, who had said of her:
“She is in relative terms, a very inexperienced politician with no legal experience, who’s been silent – and answered to Downing Street when she should have been independent… It is very serious. At the heart of it is a constitutional obligation on the Lord Chancellor to speak and on this issue there has been silence.”
Enough said. The point is made, but let us suppose that this is Brexit 1986: Mrs T is in 10 Downing Street and has just got her way to force through a referendum on whether the country should remain in the European Community (as the EU then was) and the issue of whether it is for her or Parliament to trigger the then equivalent of Article 50 of the Lisbon Treaty is before the Divisional Court. The constitution of that court would inevitably include the then Lord Chief Justice, Lord Lane. To his right might be Watkins LJ and to his left Drake J. Suppose next that the issue for decision is the same: whether, as a matter of constitutional law of the United Kingdom, the Crown – acting through the executive government of the day – is entitled to use its prerogative powers to give notice under the relevant Article for the United Kingdom to cease to be a member of the European Union. Suppose too that the outcome is the same:
“We hold that the Secretary of State does not have power under the Crown’s prerogative to give notice pursuant to the relevant Article for the United Kingdom to withdraw from the EC.”
What headline would then have adorned the front page of the Daily Mail? It is to be hoped (but could not be guaranteed) that the description “Enemies of the People” would be farthest from the mind of David English, the then editor of that particular tabloid, as the Mail had been since 1971 when it ceased to be a true broadsheet.
The reasons? Outside their day jobs, the Lord Chief Justice was Sir Geoffrey Lane AFC who had served in the Royal Air Force from 1939 to 1945, becoming a squadron leader in Bomber Command in 1942, aged 24. Lord Justice Watkins was Sir Tasker Watkins VC, having won his Victoria Cross for gallantry in Normandy after D-Day, aged 26. Mr Justice Drake was Sir Maurice Drake DFC, who had served as a navigator in 96 and 255 Nightfighter Squadrons receiving his Distinguished Flying Cross aged 21. “Enemies of the People”? Plainly not and the current editorial team at the Daily Mail might usefully reflect that had it not been for those members of the judiciary, their comrades-in-arms and their successors on the bench, there would have been no freedom of the press, still less the ability of the current editor Paul Dacre to authorise the publication of a front page in the terms that he did. The pity is the abuse of that position that has occurred. At least the reaction demonstrates emphatically that Dacre and his paper got it badly wrong.
Jackson 2017: fixed costs crystal ball gazing
Back to 2016. On 11 November 2016, it was announced that Lord Justice Jackson had accepted an invitation to draft a report into whether there should be a major expansion of fixed recoverable costs. To assist him, there would be a panel of assessors, including the Senior Queen’s Bench Master and the Senior Costs Judge together with various silks and other legal luminaries, and that Sir Rupert would be accepting submissions until 16 January 2017. Thereafter, he would begin writing with a view to completing his report by 31 July 2017.
Those with an interest in fixed costs will recall that in his IPA lecture delivered on 29 January 2016, Sir Rupert revealed plans under which a grid of fixed costs would be imposed on all civil claims worth up to £250,000. Under the grid, the case would be determined by the sum or value of the property recovered where the claimant won. Where the defendant was successful, it would be determined by the “sum or value of the property claimed”.
That there should be an expansion of fixed costs is of no surprise. Indeed, Lord Woolf proposed fixed costs in the fast track 20 years ago, but they have yet to materialise in full. During 2016, however, four cases we have published in Costs Law Reports suggest that fixed costs, even in low-level cases, are not without their difficulties. That being so, a good sense rhetorical question is: if you’re having difficulty in small claims, how on earth will fixed costs work in multitrack cases?
First the judgments.
- Broadhurst v Tan  2 Costs LO 155. Fixed costs which apply in low value personal injury claims under CPR 45 section IIIA cease to be fixed where a party makes a Part 36 offer and obtains a judgment more advantageous than that offer. In such circumstances, where a claimant makes a successful Part 36 offer in a section IIIA case, an award of fixed costs would be made to the last staging point provided by rule 45.29C Table 6B with uncapped indemnity costs to be assessed payable thereafter.
- Lowin v Portsmouth  5 Costs LO 719. Provisional assessment under CPR 47.15. Costs fixed at £1,500 plus VAT and the court fee, but that does not displace a party’s entitlement to recovering, uncapped, the costs on the indemnity basis under CPR 36.17 (4) where the sum allowed on assessment is greater than the Part 36 offer.
- Bird v Acorn Group Ltd  6 Costs LO 959. Fixed costs in Employer Liability/Public Liability cases to which CPR 45.29E(4)(c) apply. A disposal hearing listed for the quantification of damages payable after judgment is a trial within the meaning of the rule, so fixed recoverable costs are payable at a higher rate than otherwise would be the case, upon a settlement occurring between the date of listing and the date fixed for the disposal hearing.
- Qader and Others v Esure Services Ltd and Others  6 Costs LO 973. The fixed costs regime in proceedings started under the Pre-Action Protocol For Low Value Personal Injury Claims in Road Traffic Accidents does not apply where there has been a judicial determination that the matter should continue on the multitrack.
These cases demonstrate that in the circumstances applying above, fixed costs will become unfixed, resulting in the opposite of the purpose for which they were implemented, namely to control civil costs within strict parameters.
Now the problems of expansion (the answers are for Sir Rupert to provide). How will fixed costs work if there is an issue-based costs order? What happens if there is one defendant named by the claimant but that defendant brings in multiple third parties and serves a counterclaim? What happens if there is a successful Part 36 offer: does a multitrack version of Broadhurst v Tan apply, so there are no fixed costs after the date the offer should have been accepted? The claimant wins but goes down for a 60% contributory fault. Does that mean the recovery is 60% of fixed costs or the full amount? What happens if there is more than one claimant; in a group action, is there one set of fixed costs per claimant? And what about legal aid? Some parties have legal aid and others do not. How are the costs to be sorted out in those circumstances? And the final rub: where in this mess and muddle does costs budgeting fit in and will solicitors expend significant sums on updating their time recording software to be ready for the imposition of the new electronic bill from 1 October 2017, only to be told that fixed costs will apply in all but the biggest money cases, thereby making the new bill redundant before it has even come into use?
So to those readers, to whom we always extend our Christmas greetings at this time of year, wishing them much joy and merrymaking, we also ask them to spare a thought over the mince pies about fixed costs: all comments on a Christmas card to Sir Rupert. He has much to think about.
Happy Christmas and a prosperous New Year!
The headnotes and full texts of the cases below are available to online subscribers at www.costslawreports.co.uk. Follow Costs Law Reports on Twitter to be notified of new cases as soon as they are published.
New cases this month
Wall v The Royal Bank of Scotland plc  5 Costs LR 943: Third party funding; disclosure of details of third party funders under CPR 25.14(2); whether to order disclosure would amount to an infringement of Article 8.1 of the European Convention on Human Rights.
R (Viridor Waste Management Ltd and Others) v The Commissioners for HM Revenue and Customs  5 Costs LR 965: CPR 44.2, court’s discretion as to costs; costs following dismissal of application for judicial review.
Dixon v Radley House Partnership (a Firm) and Others  5 Costs LR 979: Claimant’s failure to proffer correct court issue fee; defendant’s application for permission to amend defence; consequences of incorrect payment of the court fee for the purposes of the Limitation Act 1980.
Hospira UK Ltd v Cubist Pharmaceuticals, LLC  5 Costs LR 1011: Issue-based costs orders in patent actions: the principles applying in making percentage reductions to the general costs of the winner to reflect the success of the loser on issues upon which the winner had failed.
Glenluce Fishing Company Ltd v Watermota Ltd  5 Costs LR 1021: CPR 17.1 application to amend claim form; CPR 17.4, amendments to statements of case after the end of a relevant limitation period; incorrect court fee paid.
Dar Al Arkan Real Estate Company and Another v Al Refai  6 Costs LO 865: Costs following discontinuance under CPR Part 38; whether court should stay enforcement of a discontinuance costs order; whether previous costs orders made in favour of the claimants should be overridden by a discontinuance costs order.
Transocean Drilling UK Ltd v Providence Resources plc  6 Costs LO 883: Whether costs should be taken into account in deciding whether an offer to settle made for the purposes of CPR 36.14(1)(b) had been beaten.
Impact Funding Solutions Ltd v AIG Europe Insurance Ltd  6 Costs LO 903: Whether a disbursement funding agreement between a firm of solicitors and a finance company was a supply of a “service” by the finance company to the firm; whether the finance company’s claim against the firm’s professional indemnity insurer was covered by the indemnity policy.
King’s Lynn and West Norfolk Council v Bunning  6 Costs LO 927: Court’s discretion as to costs under CPR 44.2(2); whether costs should follow the event in favour of a legally aided defendant where the respondent local authority’s application to commit her for contempt had failed.
TUI UK Ltd v Tickell and Others  6 Costs LO 941: Proportionality of costs group litigation under Lownds v Home Office: costs allowable for inter-fee earner discussions; use of alternative dispute resolution.
Bird v Acorn Group Ltd  6 Costs LO 959: CPR 45.29E, fixed costs; whether a disposal hearing listed for quantification of damages payable after judgment is a trial within the meaning of rule 45.29E(4)(c).
Qader and Others v Esure Services Ltd and Others; Khan and Another v McGee and Others  6 Costs LO 973: Fixed costs in cases starting under the Pre-Action Protocol for Low Value Personal Injury Claims in Road Traffic Accidents: whether the fixed costs regime under CPR 45.29 applies in cases which no longer continue under the Protocol following allocation to the multitrack.
Excalibur Ventures LLC v Texas Keystone Inc and Others; Texas Keystone Inc and Others v Psari Holdings Ltd and Others; Psari Holdings Ltd and Others v The Association of Litigation Funders of England & Wales  6 Costs LO 999: Third party funding by commercial funders: whether funders, in a lost action, should be jointly and severally liable to pay costs on the indemnity basis, rather than the standard basis; whether funders who had provided security for costs should be treated differently from funders who advanced money for legal fees and the costs of expert witnesses.
Costs and Fees Encyclopaedia updating
The Civil Procedure (Amendment No. 3) Rules 2016 (SI 2016/788) amend CPR 45.41 and 47.14(7), with effect from 3 October 2016. Updated pages are now available for printing out and adding to your Costs and Fees Encyclopaedia: Pages 36–37, 47–48
The Civil Proceedings, First-tier Tribunal, Upper Tribunal and Employment Tribunals Fees (Amendment) Order 2016 (SI 2016/807) has amended the Civil Proceedings Fees Order 2008 (fees 1.5–1.6, 1.8–1.9, 5.1–5.5, 7.1–7.5, 8.1–8.7, 8.9–8A.1, and 10.1–10.3), the First-tier Tribunal (Property Chamber) Fees Order 2013 (articles 3 to 8, Schedule 1), and the Magistrates’ Courts Fees Order 2008 (fees 8.1, 8.2 and 8.3), with effect from 25 July 2016. Updated pages are now available for printing out and adding to your Costs and Fees Encyclopaedia: Pages 233–248, 287–294, 384–392