Before: HIS HONOUR JUDGE GOSNELL Between: ATV Automotive & Industrial Components (UK) Ltd (3)
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1 IN THE LEEDS COUNTY COURT Case No: D08YX820 The Combined Court Centre, Oxford Row, Leeds Before: Between: Date: 2 July 2018 Roy Richardson Dalus - and - Lear Corporation (Nottingham) Limited (1) Claimant Defendants ATV Automotive & Industrial Components (UK) Ltd (3) Mr Theo Huckle QC (instructed by Slater and Gordon) for the Claimant Mr Jonathan Carr (instructed by BC Legal) for the First Defendant Mr Kam Jaspal (instructed by DAC Beachcroft) for the Third Defendant Hearing dates: 7 th June 2018 I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic....
2 His Honour Judge Gosnell: 1. Having provided the Judgment in draft to all counsel in the case, a form of order was agreed save for the issue of what order should be made about the costs of the application. The parties were understandably anxious not to incur additional costs in relation to the application and so I agreed to accept brief written submissions from both parties and then prepare a brief Judgment giving reasons. Whilst this decision is given without a hearing the parties will not be entitled to apply to set it aside and their only recourse if dissatisfied will be by way of appeal. 2. The relevant rules from the CPR CPR 44.2 (2) contains a rebuttable presumption that if the court decides to make an order about costs the unsuccessful party will be ordered to pay the costs of the successful party. CPR 44.2 (4) states: In deciding what order (if any) to make about costs, the court will have regard to all the circumstances, including (a) the conduct of all the parties; (b) whether a party has succeeded on part of its case, even if that party has not been wholly successful; and (c) any admissible offer to settle made by a party which is drawn to the court s attention, and which is not an offer to which costs consequences under Part 36 apply. CPR 44.2 (5) states: The conduct of the parties includes (a) conduct before, as well as during, the proceedings and in particular the extent to which the parties followed the Practice Direction Pre-Action Conduct or any relevant pre-action protocol; (b) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue; (c) the manner in which a party has pursued or defended its case or a particular allegation or issue; and (d) whether a claimant who has succeeded in the claim, in whole or in part, exaggerated its claim.
3 CPR 44.2 (6) states: (6) The orders which the court may make under this rule include an order that a party must pay (a) a proportion of another party s costs; (b) a stated amount in respect of another party s costs; (c) costs from or until a certain date only; (d) costs incurred before proceedings have begun; (e) costs relating to particular steps taken in the proceedings; ( f) costs relating only to a distinct part of the proceedings; and (g) interest on costs from or until a certain date, including a date before judgment. CPR 44.2 (7) states: (7) Before the court considers making an order under paragraph (6)(f), it will consider whether it is practicable to make an order under paragraph (6)(a) or (c) instead. 3. The parties submissions The First Defendant submits that there was an important procedural issue in this case that required the determination of the court namely the legal status of the AMR report. This was an issue which was common to many other cases. For that reason, the application was listed before a Designated Civil Judge with the intention of providing authoritative determination, not just in this case but also for the future in other cases. It was submitted that following the service of Mr Zeitoun s report, even if the First Defendant had consented to an extension of time for service of expert evidence a contested hearing would still have been necessary to determine whether the AMR report was CPR compliant. The First Defendant was successful on this crucial issue it is submitted. 4. The First Defendant recognises that both parties had a measure of success in the applications made but submits that the court should not make an order for costs in the case. This was an issue which had to be determined irrespective of the overall merits of Mr Dalus s case. In addition, this is a claim to which QOCS applies (CPR 44.14). If the Claimant wins the underlying litigation he would recover all the costs of his claim including all the costs of this application but if the Defendant succeeds, although it will obtain an order for costs, those costs will be ordered not to be enforced without leave as none of the exceptions to the QOCS rules are likely to apply. The First Defendant contends that the right order would be no order for costs. 5. The Claimant submits that the First Defendant made an application to strike out the claim and that application did not succeed. The starting point therefore is that the
4 Claimant is the winner and costs should follow the event. It is submitted that the First Defendant should not have applied to strike out the claim but should have applied to the court for an order that the Claimant rectify the breach which may not have required a hearing. The Claimant relies on the dicta in Denton v White deprecating and penalising opportunism submitting that the First Defendant have unreasonably pursued an application to strike out the claim and seek a windfall. The Claimant suggests that an order for costs in the case is the appropriate order. 6. The Claimant submits that the court should ignore the fact that this is a QOCS case and the likely consequences to both parties of that being the case. That can only be determined at the end of the case when the court can decide whether any of the exceptions apply. 7. Analysis The first stage is to decide whether to make an order for costs. I accept some determination is required and according to the submissions made by both parties the choice is between no order for costs and costs in the case. Both parties claim to be the successful party (at least in part) and I accept they were both partly successful. I do not accept the Claimant s analysis that he is the successful party because I did not strike out the claim. The origin of the problem which required determination was the Claimant s decision to rely on the AMR report which I have subsequently found to be not compliant with part 35 of the CPR when it should have been. This issue was arising on a number of cases and the solicitors for the First Defendant wanted to raise the issue so the court could make a determination. They chose to apply to strike out the claim pursuant to CPR 3.4 which the Claimant would say was too draconian an application. The Claimant suggests that the First Defendant could have applied to the court for an order that the Claimant rectify the breach but the court could not have ordered the Claimant to file and serve a CPR compliant report unless he agreed he intended to obtain one and serve it. The First Defendant could perhaps have sought an order that the Claimant should file and serve a CPR compliant report with the striking out of the claim in default of compliance by a reasonable period. Whilst this would have been a less draconian application it may not have made much difference to the way this hearing proceeded given the very long delay before Mr Zeitoun s report was served. I do not accept that no hearing may have been required as the Claimant has always maintained that he was entitled to rely on the AMR report on issue to comply with the PD to part I prefer to analyse the application in this way. The First Defendant was right to raise the issue of the Claimant s non-compliance with the rules on issue and was proved right by my decision. They chose to apply to strike out the claim and chose to oppose the Claimant s application for an extension of time and by implication relief from sanctions. They were the unsuccessful party on this issue. Had they chosen to consent to an extension of time when Mr Zeitoun s report was served then the second part of the hearing would not have been required and they would have been entitled to all of the costs of the hearing. This analysis supports the view that both parties adopted reasonable positions and both had a measure of success. I do not accept that the First Defendant was opportunistic in opposing the application for an extension (which was only made in the face of the court) although they were ultimately unsuccessful as I have found.
5 9. I accept the argument that this application was in many ways a test case and both parties expended a disproportionate amount of time and resources to the issue, reflecting its importance to claimant s solicitors and defendant s insurers but not necessarily to Mr Dalus or the Defendants in this case. It seems unfair that the disproportionate costs expended in this application should stand and fall on whether Mr Dalus has a good underlying claim. Statistically he is probably much more likely to win than lose which may explain why the Claimant s solicitors are keen to roll the dice. Whilst I accept that the existence of the QOCS scheme should not affect the result of a case there is nothing wrong in principle with taking into account what the effect of the rules is likely to be when exercising a discretion about which party if any should pay costs to the other. I accept the Defendant s analysis that, in all likelihood, an order for costs in the case gives the Claimant an opportunity to recover the costs of the application with no corresponding opportunity to the Defendant. 10. I find myself in agreement with Hickinbottom LJ at paragraph 77 of his judgment in Atlasjet Havacilik Anoninim Sirketiv Kupeli and others [2018] EWCA Civ 1264: Pausing there, although by CPR rule 44.2(2)(a) it is the general rule that an unsuccessful party will be ordered to pay the costs of the successful party, rule 44.2(2)(b) provides that the court may make a different order. It seems to me that, where the concept of overall success may be a necessarily ambivalent concept (as in a complex group claim trial, in which opposing parties each have considerable success), a search for an overall winner may be a largely fruitless exercise. In any event, it is clear from CPR rule 44.2 that, in assessing costs as between parties, the court must first determine whether to make a costs order at all. BCCI (see paragraphs 9 and 63 above) illustrates that, where the court considers success and determines that no party was successful in the sense that honours were even it might be appropriate to make no order as to costs. 11. I have decided for the reasons set out above that the fairest order is no order for costs. This was truly an application and cross-application where honours were event and the search for an overall winner is a fruitless exercise. This Judgment will be handed down on 2 nd July 2018 with the main Judgment in the case.
Before: HIS HONOUR JUDGE GOSNELL Between: ATV Automotive & Industrial Components (UK) Ltd (3)
IN THE LEEDS COUNTY COURT Case No: D08YX820 The Combined Court Centre, Oxford Row, Leeds Before: HIS HONOUR JUDGE GOSNELL - - - - - - - - - - - - - - - - - - - - - Between: Date: 2 July 2018 Roy Richardson
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