Bateman – v – Joyce [2008] EWHC 90100 (Costs)

Posted on Tuesday, February 12th, 2008

Following a road traffic accident on 07/02/04, the Claimant suffered minor injuries, however the Defendant was so badly hurt that his left arm was amputated above the elbow.

Proceedings were commenced by the Claimant on 20/06/05 for damages for personal injuries, alleging that the Defendant had been negligent. The Defendant denied liability and served a Defence on 20/08/05, together with a counterclaim for loss and personal injury.

Following a round table meeting on 14/02/07, it was agreed that the Defendant would pay damages of £3,000 to the Claimant and that the Defendant would received damages of £350,000 from the Claimant.

A Consent Order was prepared by the Defendant and among other items, the Consent Order stated: The Claimant do pay the Defendant his costs of the action including the costs of this Order on the standard basis, such costs to be subject to a detailed assessment in default of agreement. The Claimant amended the Consent Order so that it stated: The Defendant do pay the Claimant his costs of the claim on the standard basis such costs to be subject to a detailed assessment in default of agreement and the Claimant do pay the Defendant his costs of the counterclaim on the standard basis, such costs to be subject to a detailed assessment in default of agreement. Following another amendment, the Consent Order was agreed and sealed on 09/03/07.

The Defendant commenced proceedings for detailed assessment for the costs being claimed on 29/05/07. The Claimant served Points of Dispute on 19/06/07 and the first point sated that the “only authority for costs and therefore the Claimant’s liability for payment of costs in favour of the Defendant relates solely to the Defendant’s costs of the counterclaim.”

The Costs Judge was referred to Medway Oil and Storage v Continental Contractors [1929] AC 88 whereby the claim should be treated as if it stood alone and that the counterclaim should bear only the amount by which the costs of the proceedings have been increased by it and that costs not incurred by reason of the counterclaim cannot be costs of the counterclaim.

The point to be decided was whether or not the Order was subject to the Medway Oil principle, in that the costs payable by the Claimant were limited to those costs incurred by the Defendant in the counterclaim only. Master Campbell was satisfied that the agreement reached between the parties’ solicitors was that each party would bear the costs of the other’s claim and that the Order was intended to reflect this. As Master Campbell considered Costs to be a highly specialised area of law, when both parties’ solicitors signed the Consent Order, they were not likely to be aware of an authority such as Medway Oil. It was only when the matter came to the attention of the Costs Unit for the Defendant and was scrutinised that the Medway Oil point was acknowledged. Neither solicitor would have been aware of the possible dramatic effect of the interpretation of the Order that the Medway Oil authority could have.

Master Campbell rejected the Claimant’s claim that the Defendant’s costs should be limited by the Medway Oil priniciple and therefore the Claimant was to pay the costs of the liability issues, subject to reasonableness.

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