AB & Ors v British Coal Corporation (Department of Trade & Industry) [2007] EWHC 1406 (QB)

[2007] EWHC 1406 (QB)Case No 960177 (Costs)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 27/06/2007
Before
MRS JUSTICE SWIFT DBE
Between
AB & OthersClaimantsBritish Coal CorporationDefendants
Mr Allan QC and Mr Bowley (instructed by Irwin Mitchell) for Claimants (CG)Mr Goss QC and Mr Griffiths (instructed by BRM) for Claimants (UDM)Mr Spencer QC, Mr Cooper, Mr Antrobus and Mr Hutton (instructed by Nabarro) for DefendantsHearing Hearing dates: 17 May 2007
Judgment
[1]On 3 April 2007, I handed down my judgment determining the level of costs to be paid to claimants’ solicitors for claims settled under the fast track or optional risk offer schemes (OROS) in the British Coal Respiratory Disease Litigation (BCRDL). On 17 May 2007, I heard argument in relation to various issues of costs connected with the dispute between the parties in relation to OROS costs. This judgment sets out my determination in relation to those issues of costs.

The background

[2]Several hundred firms of solicitors represent claimants within the BCRDL. At hearings, the interests of most BCRDL claimants are represented by counsel instructed by the Co-ordinating Group (CG), which is composed of five firms of claimants’ solicitors. The interests of former miners who were members of the Union of Democratic Mineworkers (UDM) are represented by solicitors and counsel instructed by the UDM. At the hearing relating to the costs issues, submissions were made by counsel instructed on behalf of the CG and the UDM, as well as the DTI.[3]On 25 February 1998, Mr

Justice Turner (as he then was) made an order (the continuing costs order) providing that:

“ The costs of the CG, to include the Plaintiffs’ costs relating to this Order, shall be paid by the Defendant until further order.”
The order has remained in place ever since and has governed the payment of costs throughout the litigation. On 26 January 2005, a similar order was made for payment of the UDM’s costs.[4]The Department of Trade and Industry (DTI) accepted that, by reason of the continuing costs orders, the DTI was in principle liable to pay the CG’s and UDM’s costs of the OROS costs issue, to be the subject of assessment on the standard basis if not agreed.

The issues

[5]Notwithstanding the DTI’s acceptance of their general costs liability, there were four individual items of costs that they contended they should not have to pay. These were as follows: i) The costs of the compromised appeal to the Court of Appeal against the order of Sir Michael Turner dated 3 May 2006. The DTI contended that the CG and the UDM should be ordered to pay the DTI’s costs of its appeal, including the application for permission to appeal; ii) The costs incurred by the CG and by the DTI in connection with the service by the CG of evidence which I ruled, on 29 November 2006, that they were not entitled to rely upon. The DTI contended that the CG should pay these costs; iii) The DTI’s costs incurred as a result of the failure by one firm of claimants’ solicitors, Beresfords, to provide evidence within the period of time specified in my order of 28 July 2006. The DTI contended that these costs should be paid by the CG or, alternatively, by Beresfords; iv) The costs of a second leading counsel retained by the UDM for the OROS cost hearing. The DTI contended that the retention of a second leader was a “luxury” for which the UDM should have to bear the costs itself. The first issue: the costs of the appeal The background

The first issue: the costs of the appeal

[6]In my judgment of 3 April 2007, I set out the history of the OROS costs issue, including an account of the directions given by Sir Michael Turner on 19 January 2006, 3 May 2006 and 17 May 2006, the appeal by the DTI against his order of 3 May 2006 and the hearings before me on 28 July 2006 and 29 November 2006. I shall not repeat that history here.[7]The main purpose of the directions hearing on 19 January 2006 was for Sir Michael to determine what evidence he required in order to make his decision as to the level of costs which should be paid for OROS cases. By that time, some OROS cases had been completed and many were ongoing. It was intended that a selection of cases should be made and that information about the work which had been done by claimants’ solicitors on those cases would be supplied in order to provide a basis for the decision that Sir Michael would have to make. The question that arose at the directions hearing was how best to ensure that the cases selected were truly representative of the overall caseloads being dealt with by claimants’ solicitors.[8]The DTI contended for the selection of a number of cases being handled by a cross-section of claimants’ solicitors, the claims to be selected randomly using “IDEA” computer software. They proposed that, among the cases selected, there should be some which had been dealt with under the CHA (as well as some dealt with under OROS) so as to provide a comparison between the work required to process an OROS case and that required to process a case under the CHA. The DTI proposed that bills of costs should be prepared in relation to each of the cases selected and that the evidence thereby produced should form the basis for the assessment of the appropriate level of costs in OROS cases.[9]The claimants opposed the proposal for random selection of cases. Instead, they sought directions providing that claimants’ solicitors should select a total of 50 OROS and non-OROS cases and provide information about the work done on them. Sir Michael took the view that a random selection of cases may not provide a representative ‘spread’. He acceded to the claimants’ submissions and made an order that a selection of cases should be performed by six named claimants’ solicitors in each of five categories of case. The cases were to be identified as having required ‘least’, ‘average’ or ‘exceptional’ work content. He directed that information should be provided about the work done in those cases. However, Sir Michael ordered that the DTI should have the right to challenge the representative nature of the cases selected by the claimants’ solicitors by making written objections which would then be referred back to the court.[10]Upon the claimants’ solicitors serving information about their selected cases in accordance with Sir Michael’s order, the DTI served written objections, claiming that the cases selected were unrepresentative. They repeated and developed their previous contention that an audit of randomly selected claims should be carried out. They relied, in support of their contentions, on an expert report prepared by Mr Christopher Lemar of PricewaterhouseCoopers LLP, who had examined the material relating to the selected cases. He concluded that the selection of cases could not be said to be representative. He advised that there was a lack of consistency as between the six firms in the manner in which they had made their selection. He recommended that a random selection of a significantly larger number of cases than that ordered by Sir Michael was necessary in order to provide data which could fairly be relied upon as representative. The CG continued to oppose a random selection of cases and contended that the claimants’ solicitors’ selection of cases was satisfactory for the court’s purposes.[11]At the hearing on 6 April 2006, Sir Michael heard evidence from Mr Lemar. He again rejected the DTI’s request for a random selection of cases. He also rejected their contention that the claimants’ solicitors’ selection of cases was unrepresentative. He did however, give the DTI the right to seek further information about the basis of the claimants’ solicitors’ selection of cases and ordered that the nominated claimants’ solicitors should categorise their caseloads with a view to providing information as to whether the cases selected were representative of the whole. He gave his ruling orally at a hearing on 3 May 2006 and the relevant order bears that date.[12]The DTI appealed against the order of 3 May 2006. The orders sought on appeal were set out in these terms:
“1 The Defendant’s challenge to the representative nature of the cases selected by the 6 solicitors’ firms referred to within paragraph 1 of the order dated 19 January 2006 (but made on 24 January 2006) is upheld. 2 The matter be listed for a further hearing to put in place directions for the provision of a random sample of cases to be performed by the solicitors’ firms in accordance with the recommendations set out at paragraph 5.15 of the report of Mr Lemar of PricewaterhouseCoopers dated 24 March 2006.”
[13]On 22 May 2006, the DTI’s solicitors wrote to the CG (with a copy to the UDM’s solicitors), inviting them to consent to the appeal and warning them about the possible consequences in costs if they did not. The CG declined to consent. The UDM’s solicitors did not consent but raised a query about the relief being sought by the DTI.[14]The appeal proceeded and the DTI filed Grounds of Appeal and a Skeleton Argument. The basis of the appeal was the DTI’s contention that the selection by the solicitors, as ordered by Sir Michael, was inherently unrepresentative and that his reasons for dismissing the evidence of Mr Lemar and the process of random selection advocated by him were flawed. The CG filed written submissions, opposing the DTI’s application for permission to appeal. Their submissions were not directed at the merits of the proposed appeal. The essence of the submissions was that the DTI had adopted an incorrect procedure; it was argued that they should have appealed the original order of 19 January 2006, which had rejected random selection in favour of selection by the claimants’ solicitors. It was contended that, because the DTI had failed to appeal the earlier order, it was no longer open to them to contend for the principle of random selection. The DTI responded to the CG’s submissions with further submissions.[15]On 3 July 2006, Neuberger LJ (as he was then) gave the DTI permission to appeal. In doing so, he observed that there may be something in the CG’s submissions although he did not consider that they should operate to defeat the permission to appeal. Shortly after the granting of permission, by a letter dated 13 July 2006, the CG indicated that they would consent to a direction being made, providing for a selection by Capita of random sample of cases. As a result of this change of attitude, it was agreed between the CG and the DTI that the appeal should be dismissed on the making by me of directions providing for a random sample of 500 cases to be selected by means of the “IDEA” computer software which had been referred to by the DTI at the hearing of 19 January 2006. My directions of 28 July 2006 were in substitution for the previous orders made by Sir Michael on 19 January 2006, 3 May 2006 and 17 May 2006.[16]No agreement was reached as to who should pay the costs of the appeal. Neuberger LJ remitted the issue of costs to me. Meanwhile, the CG conceded that the costs of the appeal did not fall within the ambit of the continuing costs order of 25 February 1998 and that they would therefore be at large before this court.

The DTI’s case

[17]For the DTI, Mr Spencer QC referred me to CPR 44.3 which provides:
“1 The court has discretion as to - a) whether costs are payable by one party to another; b) the amount of those costs; and c) when they are to be paid. 2 If the court decides to make an order about costs – a) the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party; but b) the court may make a different order. 3 ….[not applicable] 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; b) whether a party has succeeded on part of his case, even if he has not been wholly successful….” a) whether costs are payable by one party to another; b) the amount of those costs; and c) when they are to be paid. a) the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party; but b) the court may make a different order. a) the conduct of all the parties; b) whether a party has succeeded on part of his case, even if he has not been wholly successful….”
[18]Mr Spencer referred also to the case of Painting v University of Oxford [2005] EWCA Civ 161, at paragraph 21, where Maurice Kay, LJ observed that the correct question for the court to ask itself is “who was the real winner in this appeal?” Mr Spencer said there could only be one answer to that question. At the conclusion of the appeal, the DTI had achieved precisely what it had been seeking all along and what the claimants had been opposing vigorously up until that point. In those circumstances, the DTI should not have to pay its costs of the appeal.

The CG’s case

[19]For the CG, Mr Allan QC observed that, at the hearing of 19 January 2006, Sir Michael was faced with two competing contentions. The claimants were contending that the claimants’ solicitors should make a selection of claims which they considered were representative of those being dealt with by them and which would therefore provide a sound basis for a decision on the appropriate level of OROS costs to be made. The DTI’s contention (unsupported at that stage by expert evidence) was that the only reliable way of proceeding was by means of a random selection of cases to be made and examined. The DTI were proposing that bills of costs should be prepared in each of the cases randomly selected and were, Mr Allan argued, in effect returning to the “bottom up” approach that had been rejected by the Court of Appeal in December 2005. He submitted that, having failed to secure an order for random selection on 19 January 2006, the DTI should have lodged their appeal at that stage, rather than waiting until the further order was made on 3 May 2006.[20]In response to this latter point, Mr Spencer said that Sir Michael had given the DTI the right to challenge the claimants’ solicitors’ selection of cases if they considered it appropriate to do so. If the DTI had attempted to appeal at that stage, it is likely that permission would have been refused on the ground that the proper course was for them to exercise this right. It was reasonable, he said, for the DTI to “wait and see” whether or not the selection of cases made by the claimants’ solicitors proved to be representative before launching an appeal.[21]Mr Allan submitted that the claimants’ solicitors had complied with Sir Michael’s order of 19 January 2006 and had supplied details of a number of cases which they regarded (and still regard) as representative of the spread of cases being dealt with by claimants’ solicitors. He said that those cases would have been suitable for the broad comparison exercise required for determination of the OROS costs issue. In reality, however, the DTI were never going to be satisfied with any form of selection other than the random selection they had advocated. That being the case, they should have challenged the order of 19 January 2006, in which Sir Michael rejected the principle of random selection.[22]Mr Allan argued that the question of whether or not the DTI’s appeal was directed at the right order went to a matter which I must consider when exercising my discretion as to who should pay the cost of the appeal, namely the prospects of success of the appeal had it been pursued to a contested hearing. He reminded me that Neuberger LJ had made it clear that it would be open to the CG to argue at the appeal hearing the question of whether, having decided not to appeal the order of 19 January 2006, it was nevertheless open to the DTI to appeal the order of 3 May 2006. He said that the reason the CG had sought to compromise the appeal was not that they had believed that it was inevitably going to succeed. They had decided to consent to a random selection of cases because of the delay which would inevitably ensue if the appeal were to proceed. By the time permission to appeal was granted, it was already 18 months after Sir Michael had made the original order determining the level of LOROS and DOROS costs. The hearing of the appeal was listed for the period between 2 October 2006 and 2 February 2007. The delay in resolving the issue was giving rise to uncertainty and to concerns about the effects of any recoupment of OROS costs paid on account that might become necessary as a result of Sir Michael’s decision. There were, therefore, pressing reasons for wishing to get the issue of OROS costs finalised. It was, he said, for reasons of pragmatism alone that the CG decided to agree to the DTI’s preferred mode of selection of cases.[23]Mr Allan argued that the broad comparison exercise which was ultimately carried out by Master Hurst could just as well have been carried out using the cases selected, and the information provided, pursuant to the orders of 19 January and 3 May 2006. He said that it was unlikely that the result would have been very different. He submitted that, given how matters had developed, the position adopted by the claimants to the appeal was entirely reasonable. He invited me to exercise my discretion in the claimants’ favour.

Conclusions

[24]There is in my view no doubt that the DTI “succeeded” in their appeal. Their object had been to secure a random selection of cases to be used for determining the appropriate level of OROS costs and they achieved that object. No doubt, as Mr Allan said, the reason why the CG were anxious to compromise the appeal was to avoid further delay. Nevertheless, the effect of their concession was to give the DTI the result they had been seeking all along.[25]Had the appeal continued, it may be that the Court of Appeal would have agreed with the claimants that the DTI should have appealed the original order of 19 January 2006. But there is, in my judgment, considerable force in what the DTI say about their reason for not taking that course. One can well imagine that the Court of Appeal may have taken the view that an appeal at that stage was premature and that the DTI’s remedy was to await the selection of cases by claimants’ solicitors and then raise any objections they may have at that stage. Whilst the outcome of the appeal was not assured, it is plain from the fact that permission was granted (and from the terms of Neuberger’s comments) that it had a real prospect of success.[26]It may be, as Mr Allan submitted, that the comparison exercise carried out by Master Hurst could have been conducted equally effectively using the cases selected by the claimants’ solicitors pursuant to the order of 19 January 2006. There is, however, no doubt in my mind that the arguments about whether or not the non-random selection of claims was truly representative would have continued and would have made the eventual hearing of the OROS costs issue longer and more complex. The effect of having a random selection of cases was once and for all to dispose of arguments about whether or not the selected cases were representative.[27]In all the circumstances, I take the view that the DTI should be awarded their costs of the appeal, including their application for permission to appeal. For the avoidance of doubt, I should make clear that I do not accept any contention by the DTI that they should not have to pay any costs incurred by claimants’ solicitors in complying with the directions of Sir Michael after the appeal was lodged. Sir Michael having refused to grant a stay, they were bound to comply with those orders save during the short period for which a stay was granted by the Court of Appeal.

Against whom should the order for costs be made?

[28]The DTI contended that the proceedings in relation to OROS costs were brought solely for the purposes of the claimants’ solicitors. The claimants themselves had no interest in the outcome. Accordingly, the DTI argued, it was against the CG and/or the UDM that the order for costs should be made. Mr Spencer pointed out that the CHA had been agreed between the CG and the DTI and there was a similar agreement made between the UDM and the DTI. The order of 25 February 1998 provided for the “costs of the CG” to be paid by the DTI until further order of the court. The order of 26 January 2005 made a similar provision in favour of the UDM. Thus, it was argued, the CG and the UDM were effectively the parties to the OROS costs dispute and should be responsible for paying the costs of the appeal.[29]For the CG, Mr Allan said that there was no precedent for an order to be made against the CG. He argued that the CG were not, and never had been, parties to the action. The parties to the orders of 25 February 1998 were the claimants, not the CG. He acknowledged that the court had power in certain circumstances to make a wasted costs order against a party’s legal representative; however, he said that those circumstances plainly did not arise in this case. It was also open to the court to make an order for costs against a non-party but such an order would be exceptional and would necessitate the non-party being joined in the proceedings for the purposes of costs. He said that the CG were a creation of the CHA; they had no legal entity and there would be real difficulty in enforcing any order made against them.[30]Since the hearing, the DTI’s solicitors have written to me, requesting that I should defer any ruling on the question of who (as between the CG/UDM and the claimants) should pay the costs of the appeal. They say thatthe matter arose in the course of the hearing and that the parties responded “on their feet”, without full consideration. They ask that I should hear full argument on the issue before making a final ruling.[31]The issue of who should pay the costs of their appeal was in fact raised by the DTI themselves in their Skeleton Argument (see paragraph 3) served in advance of the hearing. I do not, therefore, accept that they werein any way taken by surprise by the point. Having raised it, it was up to them to come prepared to argue it fully if it was thought necessary to do so.[32]Moreover, the practical effect of making an order against the CG/UDM would be precisely the same as if I were to make an order against the claimants. In both instances, I would order that the amount of the costs should be set off against the generic costs and disbursements payable to the CG/UDM in the future. There would be no question of the individual claimants being financially disadvantaged by any order made against them. In the circumstances, it would not in my view be a proportionate or appropriate use of the court’s time to embark upon a full argument about the matter. There are many important issues to be determined at the forthcoming July hearings and I am very anxious that attention should be firmly focussed on the main objective of processing all BCRDL claims before the proposed end date of the scheme in 2009.[33]I make clear, however, that, if an issue arises whereby there would be significant practical consequences arising from a finding as to the appropriate parties for the purposes of an order relating to costs, I would be prepared to consider the matter further. I would not in that event consider myself bound by the decision I have reached in this judgment. I emphasise, however, that I would have to be satisfied that such a finding would be of some real practical value before I was prepared to spend scarce court time hearing full argument on the matter.[34]The parties to these proceedings (apart from the DTI) have at all times been the claimants, for whose benefit the CHA was agreed. The claimants (not the CG or the UDM) were named as the parties in the orders of 25 February 1998 and 26 January 2005. There was no suggestion then (as far as I am aware) that, insofar as costs were concerned, it was the CG and the UDM who were the relevant parties. Nor did the DTI take any procedural step (even after the Court of Appeal hearing in December 2005) to join the CG or the UDM as parties to the action for the purposes of the OROS costs issue. In those circumstances, it seems to methat they must be considered non-parties to the action. Plainly it would not be appropriate to make a wasted costs order against them. Nor am I satisfied that the circumstances are so exceptional as to justify the making of an order for costs against them. In reaching this decision, I take into account the fact that an order against them would achieve no practical consequence that would not be achieved by an order against the claimants. In all the circumstances, it seems to me that an order that the claimants should pay the DTI’s costs of the appeal (including the costs of the application for permission to appeal) by way of set off against the generic costs and disbursements payable to the CG (but not the UDM: see paragraphs 35-41) in the future would meet the justice of the case.

Should the UDM have to bear any part of the costs of the appeal?

[35]The DTI seek orders for their costs of the appeal against both the CG and the UDM. They contend that, although it was the CG which was the prime mover in resisting their application for random selection of claims and in initiating the appeal, the UDM supported the CG’s position throughout.[36]Mr Spencer argued that, at the hearing of 19 January, the UDM had opposed the suggestion of a random selection of cases. At the hearing on 6 April 2006, the UDM put in written submissions which, although brief, adopted the CG’s position. At the hearing on 3 May 2006, at a time when it was anticipated that Sir Michael would hear the DTI’s application for permission to appeal, counsel representing the UDM indicated that he would wish to make submissions on (and, by inference, in opposition to) the application. The UDM did not consent to the appeal when requested to do so. Mr Spencer submitted that, as a result of the UDM’s conduct, there was no reason to distinguish it from the CG with regard to the costs.[37]For the UDM, Mr Goss argued that, at the directions hearings in January and April 2006, the UDM was attempting to assist the court by making constructive proposals aimed at obtaining a representative sample of cases on which the court would be able to base its eventual decision. Some of its proposals were adopted by the court. He acknowledged that the UDM had aligned itself generally with the position taken by the CG, but said that it had not opposed the concept of random selection strenuously. He pointed out that the UDM had made no oral submissions on 6 April 2006. It had merely served a one-paragraph submission, adopting the position taken by the CG.[38]Mr Goss said that the UDM was never specifically invited to consent to the appeal. The DTI merely copied the UDM’s solicitors into their letter to the CG. (It is clear, however, from their response that the UDM’s solicitors believed that they were being asked to consent to the appeal being allowed). The UDM’s request for information went unanswered. The UDM made no submissions to the Court of Appeal and was not consulted in advance of the CG’s move to compromise the appeal. He said that the UDM had raised no objection to the proposed compromise. It was required to give its consent to the compromise only at the instigation of the Court of Appeal itself.[39]In short, Mr Goss argued that the UDM had played only a minor part in the dispute between the CG and the DTI as to the appropriate method of selecting cases for use at the hearing of the dispute about OROS costs. The UDM was not involved in the selection of cases. Its intervention had not caused the appeal and it had not taken any step to increase the costs thereof.[40]There is no doubt that the ‘main players’ in the argument as to the appropriate method to be adopted when selecting cases were the CG and the DTI. Although the UDM supported the submissions of the CG, it did not advance strong views of its own. The dispute would have arisen and the appeal would have resulted, even had the UDM taken no part at all in the debate. Once the appeal process was set in train, it took no active step in it and did nothing to add to the costs of the appeal. The fact that it was only at the behest of the Court of Appeal that the UDM’s solicitors were asked to sign the consent order illustrates the peripheral role the UDM took in the dispute.[41]In the circumstances, I take the view that it would not be appropriate to make an order requiring any part of the costs of the appeal to be set off against the generic costs and disbursements payable by the DTI to the UDM The second issue: the costs incurred by the CG and the DTI in connection with the service of evidence by the CG which was excluded by me by order of 29 November 2006[42]The proposed new evidence (which related to information about a further 450 cases selected non-randomly by claimants’ solicitors) would have potentially doubled the material to be considered at the OROS costs hearing and would have revived the argument about the unrepresentative nature of cases that had been selected non-randomly. In my ruling of 29 November 2006, I observed that it had not been for the CG to undertake a large exercise of evidence gathering of this kind without warning, consultation or a court order. I did not permit them to rely on the evidence. The CG have rightly conceded that they are not entitled to their own costs connected with the service of this evidence.[43]Prior to the service of their Skeleton Argument, it was not evident that the DTI were seeking their own costs in connection with this evidence. Even at the outset of the hearing, there was some uncertainty as to whether the DTI had actually incurred any costs in connection with the evidence. Sensibly, they had taken no steps before the hearing on 29 November 2006 to analyse the evidence or to investigate it in any way. It now seems that they incurred some modest costs associated with challenging in correspondence the relevance and admissibility of the evidence.[44]The effect of the continuing costs order has been twofold. First, it has permitted the CG and the UDM to represent the claimants’ interests effectively and independently in the knowledge that they will be remunerated for doing so. Second, it has prevented the parties and the court from being burdened with determinations in relation to costs on an issue-by-issue basis, which would have had the undesirable effect of distracting all concerned from the main priority of progressing claims through the BCRDL scheme. This does not mean of course that the CG and the UDM have carte blanche to act unreasonably at the DTI’s expense. In accepting that they should bear their own costs of collecting and serving the evidence with which I am concerned, the CG have recognised that it would not be appropriate for the presumption which would usually operate in the claimants’ favour as a result of the continuing costs order to apply in this particular instance.[45]The DTI are not satisfied with that concession and seek payment of their own costs. It seems to me that, within the context of this litigation and of the continuing costs order, the circumstances in which I should make an order that the claimants (or the CG or UDM) should pay the DTI’s costs are very limited and should generally be confined to instances where the conduct of the claimants or their representatives has been wholly unreasonable and/or such as to merit serious criticism. In my view, the present circumstances do not come within those categories. The third issue: the DTI’s costs incurred as a result of the failure by Beresfords to provide evidence within the time scale laid down in the order of 28 July 2006[46]Paragraph (2) of my order of 28 July 2006 provided:
“By 4p.m. Friday 22 September 2006 the CG is to file and serve the Claimant’s evidence including the 6 firms’ estimates of the work content for each of their cases selected in accordance with paragraph (1) herein. Such evidence shall include full particulars as to the basis on which the estimates have been made and shall be verified by witness statements.”
[47]In the event, only three firms complied with the time limit and, on 26 September 2006, the DTI’s solicitors wrote to the CG requesting them to ensure that the outstanding evidence was served. One of the three firms of solicitors from whom evidence was outstanding, Beresfords, did not serve its evidence until 29 September 2006. When that evidence was served, the estimates of the work content of their cases were brief and, the DTI said, provided inadequate material upon which to form a view as to the nature and reasonableness of the work they claimed to have done. The DTI contrasted the information supplied by Beresfords unfavourably with that provided by the other solicitors named in the order. Mr Lemar, who was preparing an analysis of the information provided pursuant to the order of 28 July 2006, advised that he was unable to provide any meaningful analysis of the Beresfords material. This was particularly significant since Beresfords’ cases comprised 41% of the total number of cases examined and over 50% of the OROS cases.[48]On 13 October 2006, the DTI wrote to Beresfords (with a copy to the CG), objecting to the inadequacy of the estimates they had provided and requiring them to provide further information by 17 October in order to enable Mr Lemar to complete his report. On 19 October, Mr Tucker, of the CG, replied on Beresfords’ behalf. On 20 October, the DTI issued an application, supported by witness statement, for Beresfords to provide further information within 2 days. In the witness statement, the solicitor acting on behalf of the DTI, Mr Gareth Watkins of Nabarro, stated that the information provided by Beresfords did not comply with the order of 28 July 2006. He referred to the difficulties Mr Lemar would have in producing his report by the due date, 27 October. On 25 October, Mr Andrew Tucker of the CG served a witness statement, denying that Beresfords were in breach of the order of 28 July 2006.[49]The DTI’s application was listed for hearing before me on 26 October 2006. Before the hearing, the CG agreed that a further, more detailed, breakdown of the work content of Beresfords’ cases would be provided the following week. Mr Lemar therefore, prepared a provisional report which was served on 27 October 2006. Following receipt of further information from Beresfords, he prepared an additional report on 22 November 2006.[50]The DTI pointed out that it was the CG (not the individual firms of solicitors) who were ordered to serve the relevant evidence; thus, they contended, it was for the CG to secure compliance with the order. This they had failed to do. Moreover, it was not until immediately before the hearing that the CG had agreed to provide further information. The DTI contended that, as a consequence of the evidence not being provided on time, they had incurred the costs of issuing the application seeking further information. They had also incurred the cost of Mr Lemar’s additional report which had been necessitated by the fact that he did not have all the relevant material when preparing his original report. The DTI said that the CG – or, failing that, Beresfords themselves – should pay the DTI’s additional costs incurred as a result of the failure to comply with the order.[51]In response, Mr Allan said that, in common with many other claimants’ solicitors firms, Beresfords had kept no time records for work done on BCRDL claims. All their files are electronic. Consequently, they experienced real problems in providing the information sought. He said that Beresfords had provided information pursuant to the January 2006 order. No objection was raised as to the adequacy of that information. They had been late in complying with the order of 28 July 2006 because the random selection process had initially included certain of their cases in error and this took some time to correct. The evidence was provided by Beresfords in the same format as the information they had provided the previous February. They had not been advised that the earlier information was inadequate in any way. A fortnight later, they were requested by the DTI to provide further information within two working days. The time scale was impossible to meet. Mr Allan submitted that, if further particulars had been requested and a reasonable time period had been allowed for them to be provided, this could have been done without the necessity of an application to the court.[52]Mr Allan further submitted, in connection with Mr Lemar’s involvement, that, in the event, his report had turned out to be of little use. He referred to the comments made by Master Hurst to the effect that he had derived no assistance from Mr Lemar’s Report. Mr Allan pointed out that I had observed in my judgment that Mr Lemar’s evidence had, to a large extent, been superseded by the exercise carried out by Master Hurst. He argued that it had not been necessary for the DTI to instruct an expert to analyse the cases selected by the claimants’ solicitors and the claimants should not have to pay any part of the costs incurred for this purpose.[53]It is true that Mr Lemar’s evidence played little part in the OROS costs hearing. By the time the hearing took place, Master Hurst had prepared his report and had estimated what he regarded as reasonable periods of time for the work necessary to process OROS and non-OROS cases. The exercise carried out by Mr Lemar was of a different nature entirely. Plainly, he did not have the expertise necessary to undertake the estimates of work made by Master Hurst. However, the fact that Mr Lemar’s evidence played little part in the hearing does not mean that it was unreasonable for the DTI to have instructed Mr Lemar to carry out an analysis on their behalf in October 2006. It is entirely understandable, in my view, that they should have commissioned an analysis of the material provided by the claimants’ solicitors. Given that Mr Lemar had advised them previously, it is not surprising that they entrusted the task to him. Consequently, I would not refrain from making an order in the DTI’s favour on this ground.[54]Mr Allan contended that, even if the DTI had been justified in obtaining the report, Mr Lemar had only had to analyse the material from Beresfords once. Thus, much of the work which he had undertaken on the additional report would have had to have been undertaken in any event. The DTI acknowledged that some of the fees paid in connection with the additional report would have been incurred even had Beresfords served their evidence by the date on which the original report was due. However, they said that the preparation of the additional report must necessarily have involved a certain amount of duplication of time and effort. In addition, there were the costs of the application and of correspondence between the parties.[55]I accept that Beresfords provided material that was inadequate for the purposes of useful analysis and that it was not until well after the time specified in the order that they provided the necessary further information. In this regard, they performed less well than the other solicitors’ firms who had been ordered to provide similar information. I take into account, however, the fact that they had provided information in February 2006 in the same format, to which no objection was taken. I take into consideration also the considerable difficulties they experienced in compiling the information, difficulties that were described in detail in Mr Harper’s two witness statements.[56]Once again, it does not seem to me that the circumstances are such as to warrant the making of an order that the claimants, the CG or Beresfords should pay the DTI’s costs occasioned by the delay. The fourth issue: the costs incurred by the UDM as a result of instructing a second leading counsel to appear at the OROS costs hearing[57]The UDM is usually represented at BCRDL hearings by junior counsel, Mr Brian Griffiths, and, on occasion, by very experienced leading counsel, Mr James Goss QC. At the OROS costs hearing, the UDM instructed a second leading counsel, Mr Allan Gourgey QC, who has particular expertise in contractual and commercial matters. In oral submissions, he dealt with the contractual issues concerning OROS and their relationship with the CHA, while Mr Goss confined himself to factual matters and the relevant figures.[58]The DTI contended that the instruction of an additional leading counsel was unnecessary. They argued that Mr Gourgey’s arguments added little to the submissions made on behalf of the CG as to the effect of the CHA and of the Court of Appeal judgment of December 2005. For the DTI, Mr Spencer argued that, if the UDM had wished to instruct a specialist to argue the contractual issues, then Mr Griffiths (who is extremely familiar with the BCRDL) could have argued the remaining matters. He contended that the decision to retain an additional leader was not an objectively reasonable choice. It was a “luxury” for which the DTI should not have to pay.[59]For the UDM, Mr Goss acknowledged that the instruction of a second leader had resulted in a certain amount of duplication of effort in that Mr Gourgey had to spend some time assimilating information about the BCRDL as a whole. He said that, otherwise, the preparation by both counsel had been largely discrete. Mr Goss submitted that, in the light of the stance being taken by the DTI in relation to OROS costs, it had been reasonable and proportionate for the UDM to take the step of obtaining the additional expertise of a second leader who was a specialist in the contractual field. A great deal of money was at stake. It should not be regarded as a luxury. He pointed out that the DTI had used four counsel at the hearing.[60]I am not impressed by this latter point, which was not given great prominence by Mr Goss. I am not involved in an exercise of “counting heads”. The DTI are regularly represented by leading counsel and two junior counsel, each of whom has his own area of responsibility and expertise. A third junior is brought in from time to time, mainly, as I understand the position, to advise on matters relating to costs. These arrangements reflect the demands placed on the DTI’s legal team by this litigation. They do not seem to me to assist in deciding whether the UDM’s decision to retain a second leader for the hearing of a discrete issue represented a reasonable incursion of costs which the DTI should pay.[61]I must say that I was somewhat surprised to see a second leader appearing for the UDM at the OROS costs hearing. Whilst I can well understand the importance of the issue to the UDM, it seems to me that Mr Goss would have been very well able to argue the contractual issues, in tandem with Mr Allan QC for the CG. While Mr Gourgey introduced at least one new point which had not been raised before Sir Michael or the Court of Appeal, it did not seem to me that this added a great deal to the argument. In saying this, I mean no disrespect to Mr Gourgey, who made his submissions with great ability. My point is that, in the final analysis, my decision depended on the outcome of the arguments that had been rehearsed along similar lines on previous occasions and with which counsel already instructed in the case were familiar. Having said that, it was of course open to the UDM to instruct additional counsel if it believed that it might assist its case. However, I accept the DTI’s submission that this choice was in the nature of a luxury. I accept also that, to the extent that there were additional costs involved in employing two leaders rather than one, the DTI should not have to pay. Had the second leader not been instructed, Mr Goss would have had to undertake some additional preparatory work for the hearing, although the costs of this are likely to have been significantly less than those associated with the instruction of a second leader. Adopting a broad brush approach, I direct that the DTI’s liability to pay the costs of the second leading counsel should be limited to 20% of those costs only.