Cheshire East Council

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Deputy Master hits out at “unnecessary” expenditure in judicial review and clinical negligence claims on arguing about costs at assessment

The Home Secretary wasted public money by protractedly disputing costs in a case involving unlawful detention, a Deputy Master in the High Court has said.

In TT, R (On the Application Of) v Secretary of State for the Home Department [2021] EWHC B21 (Costs) Deputy Master Campbell also criticised the Home Office for arguing that it should not have to pay applicant TT additional costs because public money was at stake.

The case dated back to 2014 when the Home Office agreed it had unlawfully detained TT and would pay damages to be assessed plus his costs.  

It was agreed that either party could address the court on any offers made under CPR 36.

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TT said an offer made under the rule which was not accepted by the Home Office had been bettered at detailed assessment, and so he was entitled to an additional 10% of the assessed costs under CPR 36.17(4)(d).

The lengthy delay had resulted from Public Interest Lawyers, which acted for TT, entering liquidation.

It was only in January 2019 that the Home Office was notified that North West Law Services had been instructed by the liquidators to recover all outstanding costs.

TT sought £89,316.12, but did not seek interest for the entire period from 2014 and credit was given for £49,867 paid on account on 1 December 2020.

DM Campbell said: “An issue has subsequently arisen with regard to an offer made under Part 36 by the claimant on 1 March 2021.  

“That offer was in the sum of £72,750 and was not accepted by the defendant, although it represented a reduction to the bill of about 20%. “However, upon the addition of the agreed figure for interest, the claimant’s actual recovery has been £74,678.02 meaning that he has beaten his own offer by £1,928, thereby engaging CPR 36.17.”

The Home Office argued that it was only this addition of interest that enabled TT to beat his own Part 36 offer and without that the offer was short of the sum required to engage CPR 47.17(4)(d).

It also said it was unjust to take into account the interest because that element arose only due to TT’s delay in bringing the proceedings for detailed assessment.

The Home Office further said it should not pay the additional sum as the funds would come out of the public purse.

TT argued that the Home Office could have prevented interest accruing by making a further payment on account.

DM Campbell said: “I am unaware of an authority which binds the court that it would be unjust to order payment of the Part 36.17(4)(d) additional sum where the public purse is paying as opposed to the situation which pertains where the paying party is an individual, a company or an insurer, so that point fails.”

The Home Office could have made the payment on account to reduce interest and “omitting to do so and failing to comply with an order to which the defendant had itself given its consent, is not a promising start when it comes to seeking a discretionary remedy, as here.  

“Nor is the fact that the defendant made no attempt to mitigate its liability for interest by making a payment earlier than the date it did, albeit that there is no obligation to do so: it just makes commercial sense that it should be done, irrespective of any delay by a receiving party in serving their bill.”

The deputy master also agreed that it was permissible to take interest into account when working out whether a Part 36 offer has been beaten.

Criticising the Home Office’s conduct, DM Campbell said: “It is dispiriting how much public money is expended unnecessarily in arguing about those costs at assessment. Having carried out numerous provisional and detailed assessments involving paying parties where payment of the costs is coming out of public funds, and which have concerned predominantly, claims for judicial review such as the case here and clinical negligence involving NHS Trusts, it is dispiriting how much public money is expended unnecessarily in arguing about those costs at assessment.

“Many such matters will have been capable of settlement much earlier, either through effective Part 36 offers being made at an early stage or through a costs mediation before the fee for the assessment has been incurred…in the present case, the public purse was put to unnecessary expense by the defendant’s failure to make a Part 36 offer at a level sufficient to give it costs protection had it been rejected, and in a sufficient sum so as to be attractive to the claimant and thus to make it acceptable.”

DM Campbell added it was “a pity” that in advancing its ‘public purse’ argument, the Home Office overlooked the guidance given by Peter Smith J in Wills v Crown Estate Commissioners [2003] 4 Costs LR 581.

The Deputy Master said he was not persuaded that it would be unjust for CPR 47.17(4)(d) to apply and the defendant must therefore pay an additional £7,080.77 to the claimant.

Mark Smulian

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