Burton & Anor v Kingsley & Anor [2005] EWHC 1034 (QB)

Case No SOH05001[2005] EWHC 1034 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Date 25 May 2005
SOUTHAMPTON DISTRICT REGISTRY
Winchester Combined Court Centre
The Law Courts, Winchester, Hampshire, SO23 9EL
Before
MR JUSTICE RICHARDS
Between
(1) Anthony BurtonClaimants(2) Jennifer HaynesClaimant(1) Guy KingsleyDefendants(2) Leonard HarperDefendant
William Stevenson QC and Andrew Davis (instructed by Eric Robinson Solicitors) for ClaimantsEdward Faulks QC and Angus Piper (instructed by Biscoes King & Franckeiss) for First DefendantEdward Faulks QC and Angus Piper (instructed by Davies Wallis Foyster) for Second DefendantHearing Hearing date: 11 April 2005
JudgmentMr Justice Richards :
[1]This case arose out of a road traffic accident on 15 August 2001. The claimants were passengers in a Renault 19 motor car being driven by the first defendant along the westbound carriageway of the A27 near Portsmouth. The second defendant was driving a Renault Scenic motor car along the A27 in the same direction. The motor car driven by the first defendant suddenly left the carriageway, plunged down an embankment and overturned. The first claimant was rendered tetraplegic and the second claimant sustained spinal injuries in the accident.[2]The issue of liability was listed for trial before me at Winchester on 11 April 2005. On the day of the trial, however, the parties agreed terms of settlement. It was ordered inter alia that(1) there be judgment for the claimants against the first defendant, with damages to be assessed;(2) the claims against the second defendant be dismissed with no order as to costs save as otherwise provided; and(3) the first defendant pay the claimants’ costs in relation to liability, including the claimants’ costs of pursuing the second defendant.[3]I was then addressed orally by counsel for the claimants and for the first defendant on three issues, namely(i) the appropriate level of percentage uplift under the conditional fee agreements (“CFAs”) between the claimants’ solicitors and each of the claimants;(ii) whether the claimants should be awarded costs on the indemnity basis; and(iii) whether the claimants should be awarded interest on costs. It soon became apparent that counsel and the court would benefit from more detailed and better researched submissions. I therefore ordered the exchange of written submissions on the outstanding issues, with a view to my handing down a decision in writing on those issues.[4]I have now received and considered written submissions from counsel. It has been made clear on behalf of the claimants that the issue of interest on costs is no longer pursued. I shall deal in turn with the two issues that remain.

The conditional fee agreements

[5]The claimants’ solicitors entered into a CFA with each of the claimants on 9 September 2001, less than four weeks after the accident. The agreed uplift or success fee under each agreement was 100%. The claimants seek to recover that uplift from the first defendant. The first defendant submits that 100% is an unreasonable figure and that it should be reduced to 10% or to a maximum of 20%.[6]The relevant provisions of the Civil Procedure Rules and the Costs Practice Direction are set out in a number of Court of Appeal authorities (see e.g. Atack v. Lee [2004] EWCA Civ 1712, para 3) and do not need to be repeated here. New rules have been introduced in respect of accidents that occurred after 5 October 2003, but the new rules are not to be applied in relation to cases that fall under the old regime: Atack v Lee, paras 11-12 and 52. The present case falls squarely under the old regime.[7]If the reasonableness of the uplift fell to be determined by reference to the position at the date of trial, the uplift sought by the claimants would be patently absurd. The claimants’ counsel felt able to submit in their skeleton argument for the liability hearing:
“Put shortly, the Claimants were innocent passengers; the two Defendants blame each other. The Claimants contend that they are bound to succeed in full against one or other or both of the Defendants.”
[8]It is, however, well established that the reasonableness of the uplift falls to be determined by reference to the circumstances that were known or should reasonably have been known at the date when the CFA was entered into: Callery v. Gray (No.1) [2001] EWCA Civ 1117, [2001] 1 WLR 2112, paras 96-100; Atack v. Lee, para 51; KU v. Liverpool City Council [2005] EWCA Civ 475, The Times 16 May 2005, para 20.[9]A two stage success fee, providing e.g. for a low uplift if the claim settles within a defined period but a higher uplift if it does not settle within that period, is permissible and is to be encouraged: Callery v. Gray,paras 106-112; Atack v. Lee, para 51. It is not, however, mandatory. It was therefore open in principle to the claimants’ solicitors to agree a single percentage figure. But where a single success fee is agreed, it will not generally be possible to justify as high a percentage figure as the upper figure in a two-stage success fee: KU v. Liverpool City Council, paras 21-22.[10]Where a single success fee has been agreed, the solicitors do not have the power or duty to renegotiate the CFA in the light of changed perceptions of the risk as time goes on, nor does the court have power to direct that a success fee is recoverable at different rates for different periods of the proceedings: KU v. Liverpool City Council, para 49. As Brooke LJ expressed it in that case, at para 42:
“Nowhere in the statute, the regulations, or the rules is there any indication that the court is to have the power to subvert the statutory scheme by determining that although the level of a success fee was reasonable in view of the facts which were or should have been known to the legal representative at the time it was set, he is only entitled to recover a different, much lower, success fee in respect of some later period when different facts were or should have been known to him ….”
[11]The reasonableness of an uplift under the old regime is dependent on the particular circumstances of each case. Nevertheless the decided cases give some guidance.[12]In Callery v. Gray the claimants had in each case suffered minor injuries in a road traffic accident. The guidance given by the court was given “in the context of the type of claims which are the subject of this appeal, that is to say, modest and straightforward claims for compensation for personal injuries resulting from traffic accidents” (para 102). The court pointed to the existence of statistical support for a success rate of up to 98% in respect of claims of the type it was considering. It stated that it was impossible to foresee all the circumstances in which a straightforward claim could become one with a material degree of risk, though “[i]n the case of a claim by a passenger, for example, the risk will be small” (para 103). The court’s conclusion was that “where a CFA is agreed at the outset in such cases, 20% is the maximum uplift that can reasonably be agreed”, assuming that there was no special feature that raised apprehension that the claim might not prove to be sound (para 104). The conclusion was expressed to be based on very limited data and subject to review once sufficient data were available to enable a fully informed assessment of the position (para 105).[13]Atack v. Lee involved appeals in two cases. In the first, a motor-cyclist claimed that he had sustained injuries when the defendant drove his lorry negligently at a roundabout. That claim was settled only after the trial judge had made a ruling on liability. The district judge had reduced the allowable success fee from 100% to 50%, a decision upheld on appeal to the circuit judge. The Court of Appeal stated that the case did not come within the scope of what was said in Callery v. Gray about modest and straightforward claims, and that the issue related to the reasonableness of the district judge’s approach in a case involving two moving vehicles where liability was clearly in issue when the CFA was entered into. The court looked in some detail at what was known or should have been appreciated at that time. It held that 50% was well within the range reasonably available to the district judge, though some judges might reasonably have considered a single success fee of up to 67% to be reasonable.[14]In the second case under appeal in Atack v. Lee, an elderly lady suffered injuries when the defendant’s vehicle reversed into her while she was walking in a supermarket car park. Proceedings were brought, but the case was settled for a sum exceeding £15,000 after the defence was filed. At the time when the CFA was entered into there was uncertainty about the identity of the driver, but the Court of Appeal held that this could have been resolved by a single telephone call to the police, which the solicitor could have made before entering into the CFA. In the court’s view the only possible risk related to the possibility of the claimant refusing a payment in on her solicitor’s advice and then not beating the payment in. The court considered that neither that risk nor any other factor in the case justified a success fee higher than 20%.[15]In KU v. Liverpool City Council the claimant, at the age of 4, had injured her leg when she had stepped into a hidden hole while walking across the grass verge between a public car park and a highway. The Court of Appeal examined various statistics relating to the incidence of success in tripping cases. It observed that this was not a typical case involving an alleged tripping accident on a city pavement. The solicitor had visited the scene and could see that the hole represented a concealed trap for the unwary. He had spent 78 minutes taking his client’s instructions before the CFA was entered into. The identification of the owner of the grass verge should not prove over-complicated, and the likelihood of a defence proving successful was not particularly high. In the court’s judgment an appropriate single success fee would have been 50%, reflecting a 2:1 chance of success.[16]Keeping in mind the general guidance to be derived from those authorities, I turn to consider the particular circumstances of the present case.[17]The best evidence as to what information was known to the claimants’ solicitors at the time when the CFAs were entered into is contained in the solicitors' “CFA risk assessment” dated 6 September 2001. That document gives a brief description of the accident and injuries, and continues:
“POINTS TO BE CONSIDERED AS TO LIABILITY a. Is there any witness evidence available? The Police are undertaking a thorough investigation. However, on speaking with Sgt Cook, to date the information on liability they have obtained is conflicting. The Police enquiry is still continuing and it may be some time before access to the Police report is going to be available. Mr Kingsbury has advised friends and family of differing versions of what occurred ranging from his rear tyre blowing out to being hit from behind and forced off the road. Therefore, there is no clear evidence as to what caused the accident at this current time and there could be several alternate causes. Potentially there is an untraced driver – but with Kingsbury’s ever changing stories it’s difficult to determine what actually happened. b. Is there to be an official investigation? Yes, there is, a police investigation. It is likely to take some time. Have been advised that a number of the witnesses are on holiday or shortly to go on holiday and therefore delays are to be expected. Police are reluctant to make any comment as to liability at this current time. With as many as 10-11 witnesses the evidence is conflicting (and as yet not all statements have been taken). Vehicle has been examined and it did appear there was no mechanical failure. Theory of Kingsbury being hit from behind has been raised. c. Are there any complicating factors? As passengers, Anthony and Jenny, are in a strong position. It is anticipated that Guy will not co-operate. He is showing no remorse for what has happened and rather than face the consequences of what occurred he will do [what] he can to avoid implicating himself. Constantly changing version of events to his friends and family. There have been allegations that a vehicle was involved that did not stop at the scene of the accident so that MIB may become involved. Potential seat belt issue for Jenny Haynes – did she have it on? If Guy is innocent party he has LEI which would cover the passengers. Possibility of a split trial. CLIENT a. How credible is your client? Anthony has a good recall of the circumstances of the accident. He is clear that Guy is at fault and over reacted. He is not indicating any form of bitterness or anger at Guy, simply recites the details of the accident as he recalls them. Jenny has no recall of the accident at all. In terms of credibility, ACH determining that Anthony’s evidence is going to be credible. … OVERVIEW What are the prospects of succeeding on primary liability in this case? Strong – yet before all evidence obtained uncertain as to duration of case and difficulties to be faced. … CONCLUSION This is potentially a complicated matter. There is no clear picture of what happened, who is involved, have all witnesses/potential defendants been located? Kingsbury appears to be at fault from what Anthony has indicated but there is much witness evidence to be obtained and Kingsbury himself keeps changing the story. Kingsbury has LEI – so potentially funding would be available to Anthony and Jenny if he is in the clear. Propose 100% success fee at outset. This can be reduced upon review if facts come to light or an admission of liability is forthcoming at an early stage. Anticipate that in any event there will be substantial work to be done on quantum side alone.”
The Police are undertaking a thorough investigation. However, on speaking with Sgt Cook, to date the information on liability they have obtained is conflicting. The Police enquiry is still continuing and it may be some time before access to the Police report is going to be available. Mr Kingsbury has advised friends and family of differing versions of what occurred ranging from his rear tyre blowing out to being hit from behind and forced off the road. Therefore, there is no clear evidence as to what caused the accident at this current time and there could be several alternate causes. Potentially there is an untraced driver – but with Kingsbury’s ever changing stories it’s difficult to determine what actually happened. Yes, there is, a police investigation. It is likely to take some time. Have been advised that a number of the witnesses are on holiday or shortly to go on holiday and therefore delays are to be expected. Police are reluctant to make any comment as to liability at this current time. With as many as 10-11 witnesses the evidence is conflicting (and as yet not all statements have been taken). Vehicle has been examined and it did appear there was no mechanical failure. Theory of Kingsbury being hit from behind has been raised. As passengers, Anthony and Jenny, are in a strong position. It is anticipated that Guy will not co-operate. He is showing no remorse for what has happened and rather than face the consequences of what occurred he will do [what] he can to avoid implicating himself. Constantly changing version of events to his friends and family. There have been allegations that a vehicle was involved that did not stop at the scene of the accident so that MIB may become involved. Potential seat belt issue for Jenny Haynes – did she have it on? If Guy is innocent party he has LEI which would cover the passengers. Possibility of a split trial. Anthony has a good recall of the circumstances of the accident. He is clear that Guy is at fault and over reacted. He is not indicating any form of bitterness or anger at Guy, simply recites the details of the accident as he recalls them. Jenny has no recall of the accident at all. In terms of credibility, ACH determining that Anthony’s evidence is going to be credible. OVERVIEW What are the prospects of succeeding on primary liability in this case?

CONCLUSION

[18]On 25 October 2001, just over a month after entering into the CFAs, the claimants' solicitors wrote to the first defendant's insurers, holding him responsible for the accident and indicating that they would be seeking an immediate interim payment as soon as liability was accepted.[19]Thereafter the matter took a very long time to resolve. The first claimant, Mr Burton, adhered to his account; and it is fair to say that his view that the first defendant, Mr Kingsbury, had overreacted would have derived support from the fact that Mr Kingsbury was very young and had only just passed his driving test. Mr Kingsbury himself at no time gave a satisfactory version of events. He gave an account to the police in formal interview in January 2002, but subsequently accepted that what he had told the police was almost certainly wrong and that he did not have a mental picture of how the accident happened. The suggestion that an untraced driver had been responsible for the accident was maintained for a long time but was eventually dropped. Mr Kingsbury also sought to put the blame for the accident on the second defendant, Mr Harper, who consistently denied liability. The other witnesses gave a variety of accounts. Some implicated the first defendant, some the second defendant, but the overall picture was far from clear.[20]Nevertheless, by the end of April 2003 the claimants had adopted the position reflected in their counsel's skeleton argument for the liability hearing, that they were bound to succeed against one or other or both of the defendants. Thus a lengthy letter was written on 30 April 2003 to the solicitors for the two defendants, stating that the claimants were "the innocent victims of this terrible accident" and that "we consider it extremely unlikely on the evidence we have seen that our clients will fail to succeed in full against one or both of Mr Kingsbury and Mr Harper".[21]I must come back, however, to the position at the time when the CFAs were entered into. What happened subsequently may perhaps throw some light on the assessment made at that time, but must not be allowed to distract me from the correct focus of my attention. As to that, my conclusions are as follows:(1) It was reasonable for the claimants' solicitors to enter into the CFAs with their clients when they did.(2) The CFA risk assessment of 6 September 2001 contained a fair survey of the position at the time. Nor was there further information that ought to have been known at that time. Reasonable initial inquiries had been made. A police accident report had been requested (and apparently paid for) but was not in fact received until April 2002. The police interview of the first defendant took place only in January 2002. It took a lengthy time for all the witness evidence to be collected.(3) The assessment that the claimants' case was "strong" was correct. But it was also reasonable to acknowledge the existence of uncertainties and difficulties which, as it seems to me, did create a very significant element of risk. The fact that the claimants had been passengers and were plainly not themselves to blame was an important consideration. But there remained the possibility that this was an accident for which no-one was to blame, or that the blame lay with an untraced driver, or that the claimants would not be able to establish who was to blame.(4) The potential complexity and cost of the case overall was increased by the seriousness of the claimants' injuries.(5) I note that the CFA risk assessment of 6 September 2001 contemplated that the initial success fee could be reduced on review if facts came to light or an admission of liability was forthcoming at an early stage. As the authorities now show, this was a misunderstanding of the legal position. On the other hand, it would have been open to the claimants' solicitors to agree a two-stage success fee at the outset. But that does not seem to have been considered. What therefore falls to be assessed is the reasonableness of the single success fee of 100%.(6) In my judgment the case does not fall within the Callery v. Gray category of modest and straightforward claims for compensation for personal injuries resulting from traffic accidents and is not one where the maximum uplift that could reasonably be agreed was 20%.(7) On the other hand, I consider that the 100% uplift actually agreed was too high. The chances of success were much higher than evens. The degree of risk was such that a reasonable figure would in my judgment have been in the bracket of 33% to 50%. The claimants should be allowed a figure at the top end of that bracket.[22]Accordingly, on the first issue I hold that the allowable uplift under the CFAs is 50%.

Indemnity costs

[23]The claimants contend that their costs should be assessed on an indemnity basis, alternatively that they should be assessed on the standard basis until 20 May 2003 and on an indemnity basis thereafter. That significance of that date is that it is 21 days after the letter of 30 April 2003 from the claimants' solicitors to the defendants' solicitors, which I have already mentioned in the context of the CFA uplift issue.[24]The letter of 30 April 2003 disclosed the witness statements obtained on behalf of the claimants and set out a detailed summary of the effect of the available evidence. It invited the defendants to admit liability in full for the accident, leaving the defendants to fight out between themselves the issue of apportionment. The defendants were asked to admit liability or to formalise their denials of liability in precise detail. The letter concluded with the following "without prejudice" section:
“As stated above, we consider our clients will succeed in recovering in full against one or both of your clients …. In the light of the potential value and seriousness of both claims but in particular that of Mr Burton and the lack of evidence suggesting that blame will fall anywhere other than on your two clients, we see no reason to make a Claimant's Part 36 offer that, if accepted, would lead to either of our clients recovering less than 100% of the value of their claims. We have made our views on liability very clear throughout this claim. Both potential defendants have thus far failed to provide any convincing reason why they should be released from the claims. We hereby formally put you on notice that should you not admit liability within the next 21 days we will seek from any unsuccessful defendants the costs of investigating and (as appropriate) fighting liability on an indemnity basis together with interest thereon from the expiry of the 21 days from receipt of this letter.”
[25]The claimants' contention is that the letter was intended to be akin to a Part 36 offer. Where a Part 36 offer is made and at trial the defendant is held liable for more than the proposals contained in the offer, the court may order costs on an indemnity basis under CPR 36.21. The claimants acknowledge that the situation does not fall strictly within Part 36, but submit that the same result should follow by reference to the ordinary discretion of the court as to the award of costs.[26]CPR 44.3 sets out factors to which the court must have regard in the exercise of its discretion:
“(4) In deciding what order (if any) to make about costs, the court must have regard to all the circumstances, including - (a) the conduct of all the parties; … (c) any payment into court or admissible offer to settle made by a party which is drawn to the court's attention (whether or not made in accordance with Part 36). (5) 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 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 his case or a particular allegation or issue ….”
CPR 44.4 contains provisions concerning the standard basis and indemnity basis of assessment, but does not prescribe the circumstances in which orders on one or the other of the bases are to be made. (a) the conduct of all the parties; … (c) any payment into court or admissible offer to settle made by a party which is drawn to the court's attention (whether or not made in accordance with Part 36). (a) conduct before, as well as during, the proceedings and in particular the extent to which the parties followed 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 his case or a particular allegation or issue ….”[27]In Reid Minty (a firm) v. Taylor [2002] 1 WLR 2800, May LJ stated at paras 27-32 that if costs are awarded on an indemnity basis, in many cases there will be some implicit expression of disapproval of the way in which the litigation has been conducted, but that will not necessarily be so in every case. Litigation can be conducted in a way which is unreasonable and which justifies an award of costs on the indemnity basis even though the conduct of the paying party could properly be regarded as lacking moral probity or deserving moral condemnation. Kay LJ expressed agreement and added this:
“37. … The approach of the Civil Procedure Rules is a relatively simple one: namely, if one party has made a real effort to find a reasonable solution to the proceedings and the other party has resisted that sensible approach, then the latter puts himself at risk that the order for costs may be on an indemnity basis. What would be a reasonable solution will depend on all the circumstances of the case and might, in a case which is clearly of no merit, include pointing out, in such detail as is appropriate, the fundamental weaknesses of the case being presented by the other side and inviting consideration of abandonment ….”
[28]In Kiam v. MGN Ltd (No.2) [2002] 1 WLR 2810, Simon Brown LJ said this in relation to the approach of May LJ in Reid Minty:
“12. I for my part understand the court there to have been deciding no more than that conduct, albeit falling short of misconduct deserving of moral condemnation, can be so unreasonable as to justify an order for indemnity costs. With that I respectfully agree. To my mind, however, such conduct would need to be unreasonable to a high degree; unreasonable in this context certainly does not mean merely wrong or misguided in hindsight. An indemnity costs order made under Part 44 (unlike one made under Part 36) does, I think, carry at least some stigma. It is of its nature penal rather than exhortatory …. 13. It follows from all this that in my judgment it will be a rare case indeed where the refusal of a settlement offer will attract under Part 44 not merely an adverse order for costs, but an order on an indemnity basis rather than standard basis ….”
[29]In Excelsior Commercial & Industrial Holdings Limited v. Salisbury Hammer Aspden & Johnson [2002] EWCA Civ 879, Lord Woolf CJ, having considered both Reid Minty and Kiam v. MGN Ltd, observed in relation to the latter:
“31. In the context of that case I see that those paragraphs set out the need for there to be something more than merely a non-acceptance of a payment into court, or an offer of payment, by a defendant before it is appropriate to make an indemnity order for costs. Insofar as that is the intent of those paragraphs, I have no difficulty with them. However, I would point out the obvious fact that the circumstances with which the courts may be concerned where there is a payment into court may vary considerably. An indemnity order may be justified not only because of the conduct of the parties, but also because of other particular circumstances of the litigation …. 32. I take those two examples only for the purpose of illustrating the fact that there is an infinite variety of situations which can come before the courts and which justify the making of an indemnity order ….”
Waller LJ agreed, adding at para 39 that the question will always be: is there something in the conduct of the action or the circumstances of the case which takes the case out of the norm in a way which justifies an order for indemnity costs?[30]In the present case the claimants submit that they strove to achieve as early a resolution to the issue of liability as possible, whereas the defendants did not take such a proper case. Particular criticism is directed at the first defendant for in effect ignoring, as it is said, the matters raised in the letter of 30 April 2003. Although he attempted to particularise his position on 30 October 2003, he subsequently departed from that, and there was a conflict between his pleaded case and his evidence. The inference that it is sought to draw is that his advisers realised from an early stage that he was likely to be found at least partly to blame, but refused to admit liability or take contribution proceedings against the second defendant in the light of the robust position taken by the second defendant until the last possible moment. The second defendant is criticised in turn for taking that robust position. It is submitted that nothing changed between the letter of 30 April 2003 and trial, and that the very purpose of the letter was to achieve what in fact happened without the calling of evidence almost two years later.[31]It is submitted that in the circumstances the case does fall outside the norm and that the limited stigma that might attach to he insurers and solicitors for the defendants by reason of an award of indemnity costs would not be inappropriate. The factors in CPR 44.3(4)-(5) apply in favour of the claimants. It is an appropriate case for an award of costs on an indemnity basis in the exercise of the court's wide discretion.[32]The submissions for the first defendant on this issue can be stated much more briefly. What is said is that whilst it was clear that the claimants would recover from one or the other defendant (or both), it was not clear which of the defendants was to blame and either one of them could have escaped liability entirely. Neither defendant individually could properly have agreed to settle with the claimants in advance of the trial, and although they attempted to reach agreement in advanced it proved impossible. The fact that they managed to reach agreement at the door of the court, saving all the witnesses from having to give evidence, should not be held against them. Indemnity costs would not have been awarded if the trial had been fought to a conclusion and should not be awarded now that it has settled. This is not a case where there has been a departure from the norm. There was no conduct that ought to be marked with disapproval and the defendants did not act unreasonably in defending the claims. Costs should be ordered to be assessed in the usual manner on the standard basis.[33]My conclusions on this issue are as follows:(1) The basis of assessment of costs falls to be determined in accordance with the general principles governing the exercise of the court's discretion under CPR 44.3. The letter of 30 April 2003 was not a Part 36 offer and the Part 36 regime does not apply.(2) The conduct of each defendant in maintaining a denial of liability until the day of trial was not unreasonable, let alone deserving of moral condemnation. I accept that the case against the first defendant, in particular, was strong. On the material read by me in preparing for the trial I consider there to have been a very strong probability that, had the matter been contested at trial, the first defendant would have been held to blame, at least in part, for the accident. But that was not the inevitable outcome. The witness statements left open the possibility that blame would be found to lie with one or the other of the defendants individually or would be found to be shared between them. The result would have depended on which of the witnesses proved more reliable when their evidence was tested in court. In those circumstances it was understandable that neither defendant was prepared to admit liability to the claimants unless and until the defendants were able to reach agreement as between themselves.(3) I therefore accept the first defendant's submissions. In my judgment there is nothing in the circumstances of the case that would justify an award of costs on an indemnity basis by way of departure from the norm. The appropriate course is the normal one of awarding costs on the standard basis.

Conclusion

[34]For the reasons given above, I will order that(i) the claimants are to be allowed an uplift of 50% (not 100%) under their CFAs, and(ii) the claimants' costs in relation to liability are to be assessed on the standard basis.[35]That leaves the question of the costs of determining the two issues. The first defendant has applied for his costs of resisting the claim for a 100% uplift and the claim that costs be assessed on the indemnity basis. The application is limited to the costs of preparing the written submissions. The claimants have made "preliminary" submissions (reserving their full position until after my rulings on the substantive issues) that the costs should be treated as part of the costs of the proceedings as a whole and that the first defendant should therefore be ordered to pay them.[36]Had these issues been determined on the day of the liability hearing, I would not have made any separate order for costs in relation to them. In my view they would properly have been treated as forming part of the overall costs of the liability issue, in relation to which the claimants' costs were payable by the first defendant under the agreed terms of settlement. In a situation where the parties had prepared for a full trial of liability and agreement had otherwise been reached on the day of the hearing, the need for argument on these issues in order to conclude the matter would not in my view have been a sufficient reason for drawing a distinction in relation to them in the matter of costs and making a separate order. That would have been the case despite the degree of success achieved by the first defendant both in relation to the issue of the CFA uplift (though the figure was not reduced by nearly the extent that the first defendant contended it should be) and in relation to the issue of an award on an indemnity basis.[37]In my judgment it would not be appropriate to take a different course simply because, after hearing oral argument, I decided to direct written submissions. If the decision to direct written submissions had arisen out of the fault of one party rather than the other, that might have altered the position. But that was not the case. In the event I regard the written submissions as an extension of the oral argument on the day and I have decided to exercise my discretion on costs in the same way as I would have done on the day of the hearing.[38]Accordingly I will order that the claimants' costs of the issues dealt with in this judgment are to form part of the claimants' costs in relation to liability. The first defendant is liable to pay those costs in accordance with the terms of the order already made.