Moutarde v (1) SIG Logistics (2) Transplastix [2021] EWHC 1670 (QB)

This blogpost by David Green considers Calver J’s judgment in Moutarde v (1) SIG Logistics (2) Transplastix [2021] EWHC 1670 (QB).

The case was an appeal from a decision of Master Rowley, on a short, discrete issue: when the parties settled all heads of quantum in a mesothelioma case at the door of court in the minutes before an assessment of damages hearing was due to begin, and the hearing was used only to approve a Tomlin order and to determine one question of the incidence of costs for that day: had the case settled “at trial”, giving rise to a 100% success fee, or before trial, giving rise only to a 27.5% success fee?

Negotiations over settlement had continued literally outside the court until approximately 20 minutes before the assessment of damages hearing was due to begin. The cost of immunotherapy for the claimant (a living mesothelioma victim) was apparently the source of most of the contention.

Counsel (Aliyah Akram of 12KBW for the Claimant; Jayne Adams QC for the Defendant) were able to agree a Tomlin order in respect of virtually all contested issues. But the Defendant wanted an order that the Claimant should pay the Defendant’s costs of the trial date, on the grounds that failure to achieve agreement until that late stage was caused by the Claimant’s unreasonableness.

Counsel therefore went before Stewart J at the appointed time for the assessment of damages and presented the Tomlin order for approval, and asked him to adjudicate the sole outstanding costs issue. He did so in very brief terms and in the Claimant’s favour, leaving the order in the Tomlin order (that the Defendant pay the Claimant’s costs, to be assessed) untouched.

In the Senior Courts Costs Office, Master Rowley was invited by the Claimant to find that the matter had concluded at trial, within the meaning of the former CPR r45.15(6) (which continues to apply to mesothelioma claims), because the listed assessment of damages hearing had in fact opened, and had been used to determine an outstanding issue of costs which the parties had been unable to agree.

Master Rowley did not agree with the Claimant’s submission on this point. In his judgment the success fee system was provided to compensate claimants for going to a contested trial where there was a significant risk that they might lose; this wasn’t the case here. The matter would have already met with “success” within the meaning of the CFA before the hearing began, for instance. But in any event, the incidence of costs is a matter which (at least in theory) has to be determined at the conclusion of every hearing. The mere making of a costs order could not, without more, cause a hearing to become a “final contested hearing”.

On appeal, the Claimant relied on obiter observations of Wilson LJ in Thenga v Quinn [2009] EWCA Civ 151, that a final contested hearing referred to a hearing of the substantive claim, “albeit probably […] including a hearing referable to a disputed claim for an award of costs in principle”.

Calver J had no difficulty in dismissing the appeal. The wording of the former CPR r45.15(6) refers to the final contested hearing of “the claim”, and the claim is the claim for damages for breach of duty – i.e. the substantive claim. By the time the hearing before Stewart J had opened, that claim had already been completely compromised. “The claim” did not encompass a claim for costs to be paid by or to either party, once the substantive claim was already disposed of.

Were this otherwise: a 100% uplift would become payable even if there was a trivial dispute about costs left after the conclusion of the substantive claim. There would be an incentive for claimants to leave small matters outstanding, in order to recover their 100% success fees.

On its face this is a sensible decision which – Thenga notwithstanding, which Calver J disapproved – accords with the thrust of the decisions on the opening of final contested hearings from the pre-2013 days when success fee recovery was widespread. It does, however, mean that claimants and defendants need to be clearsighted about the consequences of settling, or not settling, as the day and hour of the final contested hearing looms nearer.

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