Corby Group Litigation v Corby District Council (Costs) [2009] EWHC 2109 (TCC)

[2009] EWHC 2109 (TCC)Case No HT-09-63
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
THE CORBY GROUP LITIGATION
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 11 th August 2009
Before
THE HONOURABLE MR JUSTICE AKENHEAD
Between
THE CLAIMANTS appearing on the Register of the Corby Group LitigationClaimantsCORBY DISTRICT COUNCILDefendant
David Wilby QC (instructed by Collins) for ClaimantsStephen Grime QC (instructed by Berrymans Lace Mawer) for DefendantHearing Hearing date: 29 July 2009(COSTS)
JUDGMENT
[1]I handed down the substantive judgement in this matter on 29 July 2009. There were arguments about costs and, although I indicated my conclusions on some but not all of the matters in issue, I decided to reserve my judgement. There is no doubt that a very substantial amount turns on my decision on costs as the Claimants’ legal team had put forward a figure of over £4 million as their costs of and occasioned by the Group Litigation.[2]Following my judgement on the Group Litigation issues, and subject to questions of costs and applications for leave to appeal, I, as the judge allocated to deal with those issues, have completed all that I have been required to do. Unless I reserve to myself all issues relating to costs, I would have no further function to perform. What will now follow, it is accepted, is that the individual Claimants will revert back to the general part of the Queen's Bench Division of the High Court and will pursue their individual claims against Corby Borough Council ("CBC").[3]The costs issues which I am required to address are as follows:(i) Should the Court make a costs order at all at this stage?(ii) If so, should there be an order of costs in favour of the Claimants.(iii) If so, should the costs be payable on an indemnity or standard basis?(iv) Should there be any reduction, on any basis, in the amount of costs payable?(v) Should there be an interim costs payment order? If so, in what amount and subject to what terms if any should such an order be made? General Matters[4]There can be no doubt that overall the Claimants "won" the Group Litigation Issues. The consequence of my judgement is that 16 or possibly 15 of the 18 Claimants on the Group Register can take their individual cases on to establish causation and quantum. My findings were however such that the last two Claimants to be born in effect have no cause of action on the facts. So far as the first born Claimant is concerned, if it is finally established that he (only) suffers from "Ehler Danlos” Syndrome, he will have no effective cause of action.[5]The primary purpose of Group Litigation is the resolution of all those issues which are actually or potentially common to all members of the Group in question. In one sense, as in this case, the Group Litigation is one, albeit a critical, step on the way to the final resolution of the individual claims by members of the Group. In another sense, the Group Litigation issues, as in this case, are preliminary issues which have to be decided first.[6]In considering questions of costs, it can become a complex and difficult exercise for the Court dealing with the Group Litigation issues to order costs in circumstances in which the common defendant has taken steps to protect its position on costs under the CPR. However, that is not a difficulty in this case as no offers of any sort have been made by CBC to any or all of the Claimants. The CPR[7]The relevant parts of CPR Part 44.3 are as follows:
“(1). The court has discretion as to- (a) whether costs of 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 parties; but (b) the court may make a different order. (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; and (c) any payment into court or admissible offer to settle made by a party which is drawn to the court's attention… (5). The conduct of the parties includes- (a) conduct before, as well as during, the proceedings… (b) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue; (c) the manner in which the party has pursued or defended his case or a particular allegation or issue; (d) whether a claimant who was succeeded in his claim, in whole or in part, exaggerated his claim. (6). the orders which the court may make under this rule include an order that the 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 judgement. (8). where the court has ordered a party to pay costs, it may order an amount to be paid on account before the costs are assessed.”
[8]CPR Part 44.4(1) provides as follows:
“Where the court is to assess the amount of costs (whether by summary or detailed assessment) it will assess those costs- (a) on the standard basis; or (b) on the indemnity basis, but the court will not in either case allow costs which have been unreasonably incurred or are unreasonable in amount." (a) on the standard basis; or (b) on the indemnity basis, Should the Court make a costs order at all at this stage? 9. There is no good reason not to make a costs order at this stage. The Group Litigation is now effectively over. The Claimants have effectively and substantially won on the Group Litigation issues. It was always open to CBC to make admissions on those issues but it decided that the issues merited contesting. There are no Part 36 offers or payments into Court from CBC to complicate matters. 10. The only argument of any force advanced by Mr Grime QC for CBC was that until one knows what the final outcome of all the Claimants’ claims is it would be premature and inappropriate to award costs now. There is at least a hypothetical possibility that all the Claimants will fail to recover damages. There might be cases in which this argument would succeed but this is not one. The scale and breadth of the Group Litigation issues would inevitably lead to a major litigation exercise with a large number of witnesses, experts and documents and a very large costs risk. It was open to CBC to protect its position on the Group issues by admitting the duty (Issue 1, which in effect it did), the breaches (Issue 2), possible causation (Issue 3), foreseeability (Issue 4, not a complicated issue) and liability in Public Nuisance and breach of statutory duty (Issue 5). Put another way, these issues and the additional 25 associated issues (largely agreed to be resolved) have been fought because CBC contested them. It would be wrong for the Claimants to be out of pocket as a result. Should there be an order of costs in favour of the Claimant? 11. Since the Claimants have “won”, there should be an order that CBC should pay the Claimants costs to be assessed if not agreed. This is subject to the issue as to whether there should be a reduction in percentage terms of the full amount. Should the costs be payable on an indemnity or standard basis? 12. The principles applicable in relation to the issue as to whether costs should be awarded on an indemnity as opposed to a standard basis were summarised by Mr Justice Steel in the Buncefield litigation, Colour Quest Ltd and others v Total Downstream UK PLC and others [2009] EWHC 823 Comm: “5. So far as the legal principles are concerned there is, as might be expected, no significant dispute. The court is required to have regard to all circumstances including the conduct of the parties. The parties claiming indemnity costs have indeed won on the preliminary issues relating to liability. Accordingly the focus of the debate is upon the defendant's conduct: CPR 44.3. In that context the claimants say that Total unreasonably contested the issues of both negligence and foreseeability and defended these issues in an unreasonable manner. 6. It is accepted that whilst there is no requirement to establish conduct which is deserving of moral condemnation (though in fact both the claimants and Chevron do so contend) there must at least be conduct which takes the case out of the norm: Excelsior Commercial v Salisbury Hammer Aspden & Johnson[2002] EWCA Civ 879. It follows that the trial judge is well placed to make an assessment of the relevant criteria. 7. In this context I have also been referred to the following additional cases which also afford useful guidance: (i) in Brawley v Marcynski (No 2)[2003]1 WLR 813, Longmore LJ considered (paragraph 13) that the effect of recent authority was that "it may be appropriate to make an award of indemnity costs where there is little or no stigma to be attached to the manner in which the losing party has conducted the litigation…But… indemnity costs are, more usually, awarded when, as here, the judge disapproves of a party’s conduct in the litigation”. (ii) "Where a claim is speculative, weak, opportunistic or thin, a Claimant who chooses to pursue it is taking a high risk and can expect to pay indemnity costs if it fails." Three Rivers District Council v BCCI and the Bank of England[2006] EWHC Comm paragraph 25 per Tomlinson J. (iii) To like effect Langely J in Amoco UK Exploration v BAO[2002] 1 BLR 135 stated at paragraph 6: “There is in my judgement a sound basis for concluding that Amoco conducted itself throughout the relevant events on the basis that its commercial interests took precedence over the rights and wrongs is of the situation and it was prepared to risk the outcome of litigation should BAO resist the pressures upon it and take on the challenge…If a party embarks on or brings upon itself litigation of the magnitude of this litigation in such circumstances and suffers a resounding defeat, involving the rejection of much of the evidence adduced in support of its case, in my judgment that provides a proper basis on which it is appropriate to award costs on an indemnity basis. ” (i) in Brawley v Marcynski (No 2)[2003]1 WLR 813, Longmore LJ considered (paragraph 13) that the effect of recent authority was that "it may be appropriate to make an award of indemnity costs where there is little or no stigma to be attached to the manner in which the losing party has conducted the litigation…But… indemnity costs are, more usually, awarded when, as here, the judge disapproves of a party’s conduct in the litigation”. (ii) "Where a claim is speculative, weak, opportunistic or thin, a Claimant who chooses to pursue it is taking a high risk and can expect to pay indemnity costs if it fails." Three Rivers District Council v BCCI and the Bank of England[2006] EWHC Comm paragraph 25 per Tomlinson J. (iii) To like effect Langely J in Amoco UK Exploration v BAO[2002] 1 BLR 135 stated at paragraph 6: “There is in my judgement a sound basis for concluding that Amoco conducted itself throughout the relevant events on the basis that its commercial interests took precedence over the rights and wrongs is of the situation and it was prepared to risk the outcome of litigation should BAO resist the pressures upon it and take on the challenge…If a party embarks on or brings upon itself litigation of the magnitude of this litigation in such circumstances and suffers a resounding defeat, involving the rejection of much of the evidence adduced in support of its case, in my judgment that provides a proper basis on which it is appropriate to award costs on an indemnity basis. ” 13. The trial judge has a wide discretion. Morally reprehensible behaviour is not required to enable the courts to make an order for indemnity costs but, at least generally, there must be something which takes the conduct of the losing party out of the norm. 14. Mr Wilby QC argued that there was always a realistic probability that the Claimants would succeed, that CBC "lost” on every material issue, that much of its evidence was rejected or at least not accepted and that in effect CBC should not have defended the Group Litigation issues. This is coupled with a criticism of CBC for turning down a request by the Claimants for ADR in the summer of 2008. There are some miscellaneous criticisms such as the inaccuracies in a number of witness statements from CBC. 15. I have strongly formed the view that this was not a case in which indemnity costs ought to be ordered. I do not consider that CBC acted reprehensibly in defending the case. CBC was presented initially in the Group Litigation with a pleaded case (in the Group Particulars of Claim) which was so broad that it was difficult to understand on any sensible analysis what the Claimants’ case truly was. In those circumstances, the Master ordered the Claimants to re-plead their case in a way which was at least comprehensible. This the Claimants did in their Additional Points of Claim in April 2007. Indeed, the case as re-pleaded so far as breaches of duty were concerned ultimately successful. 16. The Claimants’ lay witness evidence in writing did little to explain what their case about breach of duty was. The Claimants ultimately relied in this context on the evidence of Mr Bosence who was subpoenaed to appear by them, with no summary of evidence provided. The fact that he was an unwilling witness (and one who was fearful of giving evidence in circumstances where he felt threatened and, I am told, his car was set alight) is not the fault in any way of the Claimants but CBC was in a position at the start of the trial of being unaware of any witness evidence against it on breach of duty. 17. The Claimants’ waste management expert, Mr Braithwaite, produced four reports, three before trial and one in late March 2009, well on in the trial. As alluded to in my main judgement, Mr Braithwaite was prone to hyperbole and there was little or no real analysis of what went wrong in the period between 1983 and 1999. He was very reluctant at least in his first three reports to analyse what went wrong on each material contract or project; his was a general approach which proceeded on the basis that there must have been very large quantities of serious contaminants all over the sites which CBC were involved with, they were disturbed by the reclamation operations and transported on and over the sites and roads without adequate precautions and that was in his word a "debacle". He provided a Chronology in his second report which was not wholly helpful because it seemed to involve throwing everything into the melting pot, such as scrap merchants burning tyres and refuse, crashes on the site and the like, as well as the production of dust. He was initially very reluctant even to consider the ground, site and chemical investigation reports which at least gave some insight into what was present on the various sites. It was only in his fourth report that he started to analyse the site investigation reports and, unsurprisingly, found some material which was useful, although his thesis remained that inadequate site investigations were done which would never have revealed what was likely to have been present. 18. Whilst the Claimants’ evidence on epidemiology, toxicology, air pollution and risk management and neonatal and foetal medicine was reasonably clear in their various experts’ reports, it was only, incipiently, in the Claimants’ Counsel’s written opening that there began to be some analysis of what happened, when and how, as well as the extent to which some of the site investigations did provide some insight. Even then, Counsel opened the case "high"; for instance he described what was hanging over Corby as an "atmospheric soup of toxic materials". Although this was taken up in the press, it was an unhelpful description and one which did not form the basis of the judgement. In his oral opening, there was little or no analysis by Counsel as to what breaches of duty occurred and when; I hasten to say that I do not criticise Counsel for this as oral openings were, by agreement, restricted in length. 19. I described in the judgement the Claimants’ approach as being akin to that of a "scattergun". Mr Grime QC called it in his written submissions “unformed”
. The Claimants had pleaded a “res ipsa loquitur” approach and their Counsel described CBC’s failures as involving a "systemic breakdown". This approach really involved throwing everything at CBC. It was really only as Mr Wilby QC cross examined some of the CBC witnesses of fact that one began to see some concentrated criticisms of how CBC ran and operated a number of the different projects and contracts. Indeed it was only in the Claimants’ Counsel’s closing, both written and oral, that a detailed analysis was done on each of the relevant projects and contracts. 20. Although I preferred the evidence of the Claimant’s experts in all the relevant disciplines, the experts called by the Defendants were all respectable and, save for Dr Searl in the field of toxicology, qualified to give evidence in their respective disciplines. 21. Subject to the question of ADR, I do not consider that CBC acted in any way improperly in defending these proceedings. Given the broad generalised nature of the claim for breach of duty against them and the lack of any careful analysis of how individual breaches of duty on individual projects or contracts impacted on the dissemination and dispersal of mud and dust throughout the relevant period, CBC could be forgiven for believing that at the very least it had a reasonably arguable defence on the facts. It could be forgiven for believing that the broad fronted attack could fail. 22. So far as the issue relating to ADR is concerned, the law on this has been considered in a number of cases. Perhaps the most useful is that of Halsey v Milton Keynes General Health NHS Trust[2004] EWCA Civ 576, Lord Justice Dyson said; “15. We recognise that mediation has a number of advantages over the court process. It is usually less expensive than litigation which goes all the way to judgment, although it should not be overlooked that most cases are settled by negotiation in the ordinary way. Mediation provides litigants with a wider range of solutions than those that are available in litigation: for example, an apology; an explanation; the continuation of an existing professional or business relationship perhaps on new terms; and an agreement by one party to do something without any existing legal obligation to do so. As Brooke LJ pointed out in Dunnett at para [14]:
"Skilled mediators are now able to achieve results satisfactory to both parties in many cases which are quite beyond the power of lawyers and courts to achieve. This court has knowledge of cases where intense feelings have arisen, for instance in relation to clinical negligence claims. But when the parties are brought together on neutral soil with a skilled mediator to help them resolve their differences, it may very well be that the mediator is able to achieve a result by which the parties shake hands at the end and feel that they have gone away having settled the dispute on terms with which they are happy to live. A mediator may be able to provide solutions which are beyond the powers of the court to provide." 16. In deciding whether a party has acted unreasonably in refusing ADR, these considerations should be borne in mind. But we accept the submission made by the Law Society that mediation and other ADR processes do not offer a panacea, and can have disadvantages as well as advantages: they are not appropriate for every case. We do not, therefore, accept the submission made on behalf of the Civil Mediation Council that there should be a presumption in favour of mediation. The question whether a party has acted unreasonably in refusing ADR must be determined having regard to all the circumstances of the particular case. We accept the submission of the Law Society that factors which may be relevant to the question whether a party has unreasonably refused ADR will include (but are not limited to) the following: (a) the nature of the dispute; (b) the merits of the case; (c) the extent to which other settlement methods have been attempted; (d) whether the costs of the ADR would be disproportionately high; (e) whether any delay in setting up and attending the ADR would have been prejudicial; and (f) whether the ADR had a reasonable prospect of success. We shall consider these in turn. We wish to emphasise that in many cases no single factor will be decisive, and that these factors should not be regarded as an exhaustive check-list… 18. (b) The merits of the case.The fact that a party reasonably believes that he has a strong case is relevant to the question whether he has acted reasonably in refusing ADR. If the position were otherwise, there would be considerable scope for a claimant to use the threat of costs sanctions to extract a settlement from the defendant even where the claim is without merit. Courts should be particularly astute to this danger. Large organisations, especially public bodies, are vulnerable to pressure from claimants who, having weak cases, invite mediation as a tactical ploy. They calculate that such a defendant may at least make a nuisance-value offer to buy off the cost of a mediation and the risk of being penalised in costs for refusing a mediation even if ultimately successful. 19. Some cases are clear-cut. A good example is where a party would have succeeded in an application for summary judgment pursuant to CPR 24.2, but for some reason he did not make such an application. Other cases are more border-line. In truly border-line cases, the fact that a party refused to agree to ADR because he thought that he would win should be given little or no weight by the court when considering whether the refusal to agree to ADR was reasonable. Border-line cases are likely to be suitable for ADR unless there are significant countervailing factors which tip the scales the other way. In Hurst, Lightman J said: "
The fact that a party believes that he has a watertight case again is no justification for refusing mediation. That is the frame of mind of so many litigants." In our judgment, this statement should be qualified. The fact that a party unreasonably believes that his case is watertight is no justification for refusing mediation. But the fact that a party reasonably believes that he has a watertight case may well be sufficient justification for a refusal to mediate. 23. (f) Whether the mediation had a reasonable prospect of success.In Hurst, Lightman J said that he considered that the "critical factor" in that case was whether "objectively viewed" a mediation had any real prospect of success. He continued (p 381):
"If mediation can have no real prospect of success, a party may, with impunity, refuse to proceed to mediation on this ground. But refusal is a high risk course to take, for if the Court finds that there was a real prospect, the party refusing to proceed to mediation may, as I have said, be severely penalized. Further, the hurdle in the way of a party refusing to proceed to mediation on this ground is high, for in making this objective assessment of the prospects of mediation, the starting point must surely be the fact that the mediation process itself can and often does bring about a more sensible and more conciliatory attitude on the part of the parties than might otherwise be expected to prevail before the mediation, and may produce a recognition of the strengths and weaknesses by each party of his own case and of that of his opponent, and a willingness to accept the give and take essential to a successful mediation. What appears to be incapable of mediation before the mediation process begins often proves capable of satisfactory resolution later."
Consistently with the view expressed in this passage, Lightman J said that on the facts of that case he was persuaded that "quite exceptionally" the successful party was justified in taking the view that mediation was not appropriate because it had no realistic prospects of success. 25. In our view, the question whether the mediation had a reasonable prospect of success will often be relevant to the reasonableness of A's refusal to accept B's invitation to agree to it. But it is not necessarily determinative of the fundamental question, which is whether the successful party acted unreasonably in refusing to agree to mediation. This can be illustrated by a consideration of two cases. In a situation where B has adopted a position of intransigence, A may reasonably take the view that a mediation has no reasonable prospect of success because B is most unlikely to accept a reasonable compromise. That would be a proper basis for concluding that a mediation would have no reasonable prospect of success, and that for this reason A's refusal to mediate was reasonable. 26. On the other hand, if A has been unreasonably obdurate, the court might well decide, on that account, that a mediation would have had no reasonable prospect of success. But obviously this would not be a proper reason for concluding that A's refusal to mediate was reasonable. A successful party cannot rely on his own unreasonableness in such circumstances. We do not, therefore, accept that, as suggested by Lightman J, it is appropriate for the court to confine itself to a consideration of whether, viewed objectively, a mediation would have had a reasonable prospect of success. That is an unduly narrow approach: it focuses on the nature of the dispute, and leaves out of account the parties' willingness to compromise and the reasonableness of their attitudes. 27. Nor should it be overlooked that the potential success of a mediation may not only depend on the willingness of the parties to compromise. Some disputes are inherently more intractable than others. Some mediators are more skilled than others. It may therefore, sometimes be difficult for the court to decide whether the mediation would have had a reasonable prospect of success. 28. The burden should not be on the refusing party to satisfy the court that mediation had no reasonable prospect of success. As we have already stated, the fundamental question is whether it has been shown by the unsuccessful party that the successful party unreasonably refused to agree to mediation. The question whether there was a reasonable prospect that a mediation would have been successful is but one of a number of potentially relevant factors which may need to be considered in determining the answer to that fundamental question. Since the burden of proving an unreasonable refusal is on the unsuccessful party, we see no reason why the burden of proof should lie on the successful party to show that mediation did not have any reasonable prospect of success. In most cases it would not be possible for the successful party to prove that a mediation had no reasonable prospect of success. In our judgment, it would not be right to stigmatise as unreasonable a refusal by the successful party to agree to a mediation unless he showed that a mediation had no reasonable prospect of success. That would be to tip the scales too heavily against the right of a successful party to refuse a mediation and insist on an adjudication of the dispute by the court. It seems to us that a fairer balance is struck if the burden is placed on the unsuccessful party to show that there was a reasonable prospect that mediation would have been successful. This is not an unduly onerous burden to discharge: he does not have to prove that a mediation would in fact have succeeded. It is significantly easier for the unsuccessful party to prove that there was a reasonable prospect that a mediation would have succeeded than for the successful party to prove the contrary.” "Skilled mediators are now able to achieve results satisfactory to both parties in many cases which are quite beyond the power of lawyers and courts to achieve. This court has knowledge of cases where intense feelings have arisen, for instance in relation to clinical negligence claims. But when the parties are brought together on neutral soil with a skilled mediator to help them resolve their differences, it may very well be that the mediator is able to achieve a result by which the parties shake hands at the end and feel that they have gone away having settled the dispute on terms with which they are happy to live. A mediator may be able to provide solutions which are beyond the powers of the court to provide." "The fact that a party believes that he has a watertight case again is no justification for refusing mediation. That is the frame of mind of so many litigants." "If mediation can have no real prospect of success, a party may, with impunity, refuse to proceed to mediation on this ground. But refusal is a high risk course to take, for if the Court finds that there was a real prospect, the party refusing to proceed to mediation may, as I have said, be severely penalized. Further, the hurdle in the way of a party refusing to proceed to mediation on this ground is high, for in making this objective assessment of the prospects of mediation, the starting point must surely be the fact that the mediation process itself can and often does bring about a more sensible and more conciliatory attitude on the part of the parties than might otherwise be expected to prevail before the mediation, and may produce a recognition of the strengths and weaknesses by each party of his own case and of that of his opponent, and a willingness to accept the give and take essential to a successful mediation. What appears to be incapable of mediation before the mediation process begins often proves capable of satisfactory resolution later." 23. Thus, the real question is: did CBC act unreasonably in refusing ADR? I have formed the view, clearly, that it did not act unreasonably. One needs to consider the time at which the request was made. By May 2008, the possibility of mediation was being discussed between solicitors. On 30 May 2008, CBC's solicitors suggested with some justification that it would be better to defer any decision on this until the exchange of expert evidence. This having taken place in July 2008, CBC’s solicitors wrote that there was no common ground between the parties and they had "no reason at all for the defendant to consider that it should make any concessions"; they refused the offer of mediation because it would be " highly unlikely to be productive in reaching a conclusion". The question of ADR was further explored over the following three months with a similar result. Given the broad nature of their Claimants’ expert evidence on breaches of duty and its linkage to the dissemination and dispersal of dust and mud, I do not consider that CBC’s position was unreasonable. Hindsight shows that CBC was wrong but one must judge the decision to refuse ADR at the time that it was under consideration. CBC had expert evidence which supported its stance on every material aspect of the Group Litigation issues and the Claimants were adopting what I have described as a "scattergun approach". It was not unreasonable to form the view that mediation would not have produced a settlement. 24. The Claimants rely upon a number of other matters. They say, through Counsel, that CBC relied on witness statements which were inaccurate and were mechanistically produced by reference to documentation. Whilst I was and am critical of some of the respects in which the witness statements were prepared by CBC and their legal advisers, I remind myself that the events with which the relevant witnesses had to deal happened 10 to 29 years ago. Most witnesses will not remember the details of what happened as long ago as that. It was not wrong in principle to construct witness statements around the documents, particularly those generated by the witness in question. It was more the way that it was done, with a number of errors not being picked up either by witness or solicitors, that was at fault. I do not get the impression however that this problem was one which should have led to a significantly greater amount of time and effort on the part of the Claimants’ legal team being expended than would have been the case if the cross references had been correct. The legal team would still have had to cross check that what the witnesses were saying in their statements was materially correct. I have no deep seated criticism of the length of the witness statements given that a number of the witnesses had to address a period of up to 20 years. There were some complaints about late disclosure butt I do not consider that this materially added to the costs. Some further documents were provided as the trial proceeded but they were provided on a voluntary basis without, usually, orders of the court. They certainly were not documents which ultimately impacted upon the outcome of the case. Some complaints are made by the Claimants about formatting of documents; those complaints are simply not being made out. Other criticisms were made about plans but, if anything, the plans prepared by CBC for the trial were much more comprehensive and comprehensible than those prepared by the Claimants’ team. The trial bundles were ultimately prepared by the Claimants following some heated procedural discussion as to who should prepare them. Ultimately, I do not consider that CBC’s legal team acted unreasonably in suggesting that it should prepare the bundles but I formed the view that, if the Claimants wanted to do it, they could and should. I cannot see that that issue added significantly to the costs. Broadly, I do not consider that any of these miscellaneous matters raised by the Claimants justify the imposition of indemnity costs. The Claimants also refer to the fact that their solicitors’ letter of 3 December 2008, headed “Part 36 Offer” offering to settle all the Claimant’s actions was rejected. I do not consider that this does assist the Claimants at this stage as one can not determine whether it will be beaten or not. 25. I am wholly satisfied that this is a case for standard costs to be paid by CBC. Should there be any reduction, on any basis, in the amount of costs payable? 26. Mr Grime QC for CBC puts forward six matters which he suggests justify a proportionate reduction in the total cost bill: (a) the scattergun approach, (b) time lost during the trial, (c) the evidence of Mr Hagen, (d) the evidence of Mr Bosence, (e) time wasted by Ms Whittell and (f) the new road point. 27. I can deal with the last four points shortly. Mr Hagen gave evidence for the Claimants. It was of very limited use; he was a Councillor at the time and was the recipient of information from Mr Bosence and he passed it on. His evidence in writing totalled 30 full pages; he was examined in chief over some 40 pages of transcript; the cross examination was over some five pages. I have no doubt that some limited cost and time was unnecessarily spent in dealing with Mr Hagen but it is difficult to say that it would in itself justify a reduction in costs. As for the evidence of Mr Bosence, it is difficult to criticise the Claimants for not obtaining a witness statement from a witness who was clearly reluctant to co-operate because he was fearful of his own position. He was examined in chief, in effect blind, by Mr Wilby and he gave important and useful evidence. As for the time spent by Ms Whittell, CBC wanted to rely upon draft witness statements of witnesses who had died; because the Claimants were somewhat suspicious about these statements, they required CBC to make an application for the admission of these draft statements. Ms Whittell was required to do some work in ascertaining how, when and in what circumstances the statements had been obtained. I do not think that this was unreasonable of the Claimants, particularly in circumstances where there was a real issue as to the reliability of some of the statements obtained from witnesses who had given evidence. The "new road point" relates to some samples taken by Mr Clark when employed by Rockingham Speedway at the line of the new road which was to join Shelton Road with Mitchell Road; this was supposed to be from old Soothills material which had been moved during the Speedway Development. The Claimants called for further disclosure in relation to this new road. In the result, they felt that they did not need to use it to any significant extent. It is more than arguable that there was some missing disclosure but I can not see that any minor increase in cost could justify a reduction in the costs order. 28. I have already made it clear that the Claimants did adopt a scattergun approach and did not seek properly to analyse what breaches of duty occurred on what projects and contracts and how such breaches led to the dispersal of mud and dust. There was no analysis of what contaminants were likely to be present in what locations. Thus, analysis of the documents would broadly have revealed, for example, that the Toxic Ponds were high in dioxins and PAHs and had less by way of heavy metals. That analysis in practice started at the beginning of the trial, began to emerge in cross examination and was finalised in the closing submissions by the Claimants. Based on my knowledge of the case, I have formed the view that if the proper analysis had been done well before the trial a significant amount of time would have been saved at the trial. 29. There was some time wasted at trial. This arose because the Claimants did not have sufficient witnesses available on a day-to-day basis to enable full days’ hearings to take place. It was accepted that the trial timetable was discussed and exchanged before the start of the trial and no objection was taken to the numbers of witnesses in particular the Claimants’ parents programmed on individual days. However it was very obvious at least to me that there were insufficient witnesses programmed by the Claimants to enable full hearing days to be achieved. I pointed this out on a number of occasions to Counsel formally and informally; for instance on the second day (page 167 of the transcript) I said that it was unlikely that family members would be cross examined at length. At that occasion, I also indicated that I would not object to witnesses being asked a few questions in chief to help them relax in the witness box. 30. The following time was then lost: Day 3: finished at 12.35 (3 hours lost) Day 4: finished at 15.20 (1 hour + lost) Day 5: finished at 12.55 (2½ hours lost) Day 6: finished at 15.05 (1½ hours lost) Day 7: finished at 13.10 (2½ hours lost) Thus, the best part of two days of trial time was lost. Indeed, more time was lost because the Claimants’ parents were subjected to long examination in chief and re-examination. A reasonably representative example is Mrs Atkinson who was examined in chief over 12 pages, cross examined over four pages and re-examined over 10 pages of transcript. If a reasonable amount of time had been spent in examination in chief, that should not have exceeded some 2 to 3 pages and re-examination not more. I assess that properly programmed and examined the Claimants’ parents should have taken a total of two days. The Claimants argue that this should not count against them because there was no objection to the original programme and some of the Claimants had pre-booked train tickets from Corby and had made other domestic arrangements. Costs were doubtless running at many thousands of pounds a day and these difficulties could have been overcome. However, given the clear indications from the Court which were obviously right (and turned out to be right) that the examination of the parents would take a much shorter time, I do consider that the Claimants and their team could and should have taken much greater steps to ensure that there were sufficient witnesses available to ensure full days’ hearings. 31. Doing the best that I can to take into account these two factors, the scattergun and trial time wasted, I have formed the view that a reduction in the Claimants’ costs entitlement of 10% would adequately and fairly reflect them. One needs to bear in mind that trial time costs, whilst significant, will represent in a case such as this not insignificantly less than 50% of the costs overall. Thus, the fact that, as in this case, some six to eight days of trial time (out of a total of 39 days) was unnecessary, does not lead to the conclusion that there should be an overall reduction of some 20%. It is likely for instance that there would have been an increased cost to the Claimants prior to the trial if they had carried out the sort of analysis which they should have done; that would in principle had been a recoverable cost. 32. It follows from the above that the Claimants are and should be entitled in my judgement to 90% of their costs to be assessed on a standard basis. Should there be an interim costs payment order? If so, in what amount and subject to what terms if any should such an order be made? 33. I see no reason why an interim costs payment order should not be made. On any count very substantial costs have been incurred by the Claimants, albeit that they have some After The Event (“ATE”) insurance and that their legal team has been operating upon a Conditional Fee Agreement (“CFA”) basis. There will inevitably have been some significant disbursement costs such as the experts’ fees incurred over a period of some 3 to 4 years. Since the Group Litigation is in substance complete, the assessment of costs by the Costs Judge could well take many months before it is completed. The notes to the CPR (44.3.15) suggest that "in general an interim order for payment of costs prior to assessment should be made, but the court has to take into account all the circumstances in the particular case including the unsuccessful parties wish to appeal, the relative financial position of each party [and] the court’s overriding objective to deal with cases justly”. 34. I was referred by Mr Grime QC to a very recent decision in the Court of Appeal, Blackmore v Cummings (29 July 2009), the Lawtel note of which suggests that "there was no legal presumption that a party was entitled to realise the benefit of a costs order in his favour by having an interim payment on account”. That note suggests that the decision of Jacob J (as he then was) in Mars UK Ltd v Teknowledge Ltd (Costs) [1999] EWHC 226 (Pat) was applied. In that case, Jacob J said: “8. I now turn to the second issue, whether or not there should be an order for interim payment. The first thing to do is to consider what the general rule should be, interim payment or not. There is no guidance given in the Rules other than that the court may order a payment on account. There is no guidance in the Practice Direction. So I approach the matter as a question of principle. Where a party has won and has got an order for costs the only reason that he does not get the money straightaway is because of the need for a detailed assessment. Nobody knows how much it should be. If the detailed assessment were carried out instantly he would get the order instantly. So the successful party is entitled to the money. In principle he ought to get it as soon as possible. It does not seem to me to be a good reason for keeping him out of some of his costs that you need time to work out the total amount. A payment of some lesser amount which he will almost certainly collect is a closer approximation to justice. So I hold that where a party is successful the court should on a rough and ready basis also normally order an amount to be paid on account, the amount being a lesser sum than the likely full amount. 9. This is likely to have practical advantages in another way. The motive for trying to prolong a detailed assessment, namely putting off the evil day when payment has to be made, will be considerably reduced when he who has to pay can only put off the evil day in respect of a considerably reduced sum. Moreover the whole point of the detailed assessment as a commercial matter may become less important with the result that there will be less detailed assessments than there used to be of taxations of costs. Thus I start from the proposition that there should be an interim payment in general. However, the court has a discretion. In exercising that discretion the court must take into account all the circumstances of the particular case. One of those is that the Defendant may wish to appeal. Another is dealing with the case in a way which is proportionate to the financial position of each party, one of the matters which one must consider in allowing the overriding objective of enabling the court to deal with the cases justly. The overriding objective applies as much to the exercise of the costs discretion as to any other discretion given under the Rules. This is a case, for example, where there is a wealthy successful party and a financially weak unsuccessful party. That is one thing that should be taken into account. Other things that might be taken into account are the likelihood of an appeal or possibly successful appeal. For example, there may be a case in which a claimant is financially weak. Even if it succeeds there might be an appeal by the defendant and the claimant needs the money to respond to the appeal. That would be a particularly good reason for ordering a payment on account.” 35. I do not proceed on the basis that there is a presumption that an interim costs order should be made but upon the basis that I have a discretion to order one. The only possible factor militating against an interim costs order is that many of the Claimants and their parents are obviously of modest means. CBC has indicated that it will probably seek to appeal and I have given them some extra time in which to review the judgement before applying for permission to appeal. If permission to appeal is granted either by me or by the Court of Appeal and any appeal were allowed and if an interim costs order were made, there is a real possibility that CBC would not recover the full amount back from the Claimants. However, that seems to me to be a difficulty which can be overcome by requiring the recipients of any interim costs payment to undertake to the Court to repay if that eventuality arises. 36. In these circumstances, and in my discretion, this is an appropriate case in which to an order payment on account of costs. 37. It is a difficult exercise, however, to assess what is an appropriate amount. In April 2008 I delivered a judgement on applications for costs capping. I decided that the cap on the Claimants’ costs as from January 2008 should be £1,120,000. That did not include VAT, the impact of the CFA or the ATE insurance premium. 38. The Claimants have submitted that they should be entitled to an interim payment of costs of £3,196,785. This is calculated as follows: Pre-Cap………………………………………..£1,241,620 Post-Cap……………………………………….£2,046,600 Plus VAT………………………………………..£449,327 Plus Insurance premium……………………….£1,050,000 Total……………………………………………£4,627,975 These figures include the 100% mark-up under the CFA. For interim costs payment purposes, the Claimants ask for 60% of the professional and other fees and disbursements (60% of £3,577,975) and the whole of the ATE premium. I am told by Mr Wilby QC that the ATE insurers will take their premium out of whatever is ordered by way of interim payment. 39. On any costs assessment, particularly on a standard basis, there is (statistically) a strong probability that there will be a reduction of between 20% and 40%. Added to that is the fact that I have reduced the Claimants’ costs entitlement to 90% of that which is assessed. 40. Mr Grime QC says, with some force, that consumer protection regulations and other authority suggests that CFAs can be subjected to critical review and there have been cases in which little or nothing is recovered pursuant to the CFA. This Court has not been provided with a copy of the CFA and it is likely that it will be produced only to the Costs Judge for his or her critical review. I am not in a position therefore to have any great confidence as to whether all or part of the 100% mark-up will be recovered and since the Claimants have chosen not to place the CFA before the Court; accordingly, I will not take it into account in my assessment. Mr Grime QC also makes the point that it is or will be at least arguable before the Costs Judge that the ATE premium is not recoverable either because, for one reason or another, the contract of insurance is unenforceable or because it was an excessive amount to pay and it falls to be reduced as a matter of costs assessment. 41. I see no reason at this stage to proceed upon the basis that the ATE premium should be payable in full upon an interim basis. Although I make no absolute finding on this topic, it may well be the case that the cost of the premium is to be reviewed for reasonableness in exactly the same way as all the other costs. 42. In my view, a reasonable amount for an interim payment can be calculated as follows: Pre-Cap………………………………………..£515,341 Post-Cap………………………………………..£1,120,000 Plus VAT…………………………………………£286,185 Plus Insurance premium………………………..£1,050,000 Total……………………………………………..£2,971,526 Less 10% as ordered by this Court………………..£297,152 Sub-total…………………………………………£2,674,374 Allow 60% of Sub-total to allow for assessment rounded down to………………………………….£1,600,000 43. This will be payable only upon appropriate undertakings that the money is to be repaid in the event of a successful appeal or as the Court of Appeal or this Court should order. This should be paid within 42 days of the date of the handing down of this judgement. I am minded to make an alteration to the interest consequences of the payment of costs for similar reasons to those put forward by Mr Justice Steel in the Buncefield case, at Paragraphs 40 to 43 of his judgement. The interest rate (8%) is a high one, if not penal and I am conscious that it is unlikely that those to whom the Claimants owe fees would impose interest charges; the lawyers’ 100% mark-up cushions them at least to some extent in this regard. Balancing matters up, I consider that a postponement of the liability for interest on costs is fair and that the starting date for interest on costs should run from six months from the date of the handing down of this judgement. Thereafter, interest should provide some recompense to the Claimants’ legal and professional team to the extent that this interim costs payment on account proves to be significantly lower than the final sum assessed by the Costs Judge; it should provide some incentive to CBC to hasten the costs assessment exercise. 47. I was disappointed to hear from Mr Wilby QC that the ATE insurers propose to take their full premium out of the interim costs payment. Whilst I make no order about this, I would expect decent insurers to limit their recovery at this stage in effect to the amount which I have allowed for the insurance premium, which is effectively 50%. 48. The parties should draw up the order and submit it to me no later than 12 August 2009.

Cited in 1 later judgment