Appeals: not worth the candle?

by Richard Tymkiw on August 18, 2016

Richard Tymkiw

“I burnt one candle to seek another, and lost bothe my time and my trauell (work)”

(Stephen Gosson : The Ephemerides of Phialo, 1579)

Poor Mr. Gosson would appear to have fared badly: the meagre earnings from his midnight candle were only sufficient to pay for the cost of its replacement!  Perhaps a little forethought would have been in order.

Caution must also be an essential watchword – when deciding whether to incur the costs of an Appeal – particularly if you are seeking to challenge the discretion exercised by the Court below.

EIL

The recently reported authority of EIL v. Knowsley Metropolitan Borough Council is a case in point;  it makes for salutary reading.

The adult Claimant (EIL) claimed damages arising from a teacher’s sexual assault upon him when a pupil at a comprehensive school.  It is now settled law that a local authority may be held liable for such a matter, if the occasion for the assault has arisen from the employment of the teacher in question.

CMC and costs

In keeping with current practice the Court was required to examine the Pretrial costs of the parties.

Those costs were considered at a special hearing known as a Costs and Case Management Conference (CMC).

There were two elements of costs involved:

(a) the parties’ actual costs incurred to the CMC; and

(b) those further costs estimated to include trial.

Prior to the CMC each party had submitted details of (a) and (b).

Costs Budget

The conduct of all Civil Litigation in England and Wales (including for instance a CMC) are governed by the Civil Procedure Rules (CPR).  CPR 3.15 empowers the Court to:

“manage the costs incurred (and in respect of future costs) to set a budget.”

Setting a Costs Budget may have a dramatic and beneficial impact.

Knowing the overall costs in store should serve wonderfully to concentrate all parties’ minds and encourage them to look at economic ways of bringing an early end to their particular dispute.

Such knowledge provides a clear persuasive impetus for compromise.

Detailed Assessment of Costs

If part of negotiations to settle include a request by one party to contribute towards their costs what is the solution if the contribution is acceptable in principle but the amount cannot be agreed?

Might the opportunity of an early settlement be lost solely because of costs considerations?

The solution can be straightforward: it is open to the parties to agree terms of compromise which include the condition that any costs contribution be assessed by the Court.

This is known as a detailed assessment of costs which – in relation to any sums below £50,000 normally takes place before a Costs Officer; higher than that the assessment is carried out by a Costs Judge.

Approved Costs Budget : determinative

When it comes to detailed assessment (under CPR 3.18) a Costs Judge will usually rely upon the last approved Costs Budget.  The Costs Judge will not lightly depart from it – unless satisfied that there is good reason for so doing.

ELI v. Knowsley MBC

At the CMC the Claimant’s (a) actual costs and (b) estimated fees were roughly equivalent to each other.  They totalled £104,373.

The main question was whether EIL’s earlier delay in bringing his claim should bar him from proceeding.  If, on the other hand, he was allowed to continue, what then were the steps required to prepare his compensation claims for trial?  How much should be allowed in the way of a costs budget for that work?

The Court was quite scathing in its criticism of the Claimant’s costs claimed; it described  (b), the estimate, as excessive or outrageous.

Court’s Costs Ruling

Following argument, the Court allowed the Claimant £55,397.75 (about £30,000 of actual costs and another £25,000 or so for future costs).

The Claimant was not happy at the Court limiting his costs in this way.

Two sums had been claimed for the costs of the CMC:

(i) actual costs incurred (to the point at which the Costs Statement had been prepared): £2,493.50; and

(ii) the Claimant’s estimated further costs of the CMC (which – by the time of the CMC – had been incurred too): £2,310.00.

At the CMC the Court agreed to allow (i) in full but awarded nothing for the estimated costs at (ii).

Accordingly the Court confined the Claimant’s total costs of the CMC to £2,493.50.

Double Jeopardy

The Court had been trenchant in its criticisms of the Claimant’s costs levels.

The Claimant had already lost effectively half of his costs of the CMC.  If there were a detailed assessment might there be further inroads made into the figure of £2,493.50?

In other words, was there a risk of double jeopardy?

Appeal

Amongst other points, the Claimant chose to Appeal the Court’s decision to limit his costs of the CMC.

The Appellate Court viewed the Claimant’s fears as well founded: it recognised that there was a real risk that a Costs Judge might take an axe to the sum allowed for the CMC (£2,493.50) because of the Lower Court’s earlier costs criticisms.

Approved Costs Budget

The Appellate Court subscribed to the beauty of simplicity: it adjudged that the £2,493.50 awarded at the CMC should be treated as an Approved Sum.  This meant that even if there was a detailed assessment, the Costs Judge was effectively bound by this figure.

This gave the Claimant elemental protection.

Drawback

However there was an unhappy sting in the tail.

Allowing for other items on Appeal, the Claimant’s Appeal costs overall had amounted to shortly over £11,500.

When presented with these Appeal costs the Appellate Judge held that the Claimant’s Appeal could not have been:

“a sensible expenditure of money, a proportionate use of Court time or a rational exercise at all that costs of this Order should have been incurred in pursuing so very little.”

Accordingly the Claimant ultimately lost out, he was not awarded the not insignificant costs of his Appeal.

Conclusion

There are some useful reminders or pointers.

  • Compromise

Put shortly the Claimant had had a number of points which he legitimately wished to pursue on Appeal.  Compromise of his claims changed all of that.  It limited the range of arguments to one or two items including the costs of the CMC.  The scenery had shifted.

  • Costs/Benefit Ratio

Given that the scope and range of arguments by the time of the Appeal hearing had radically reduced (owing to the pretrial settlement) it was essential to conduct a ruthless examination of the likely costs/benefit ratio of continuing.

Put bluntly, when all was said and done, would the likely costs of Appeal be worth the candle?

The Appellate Court clearly thought not.

 

Accordingly it is wise to tread warily when looking to pursue the time and costs of an Appeal.  Careful assessment needs to be made of the benefits that might ensue – in comparison with the inevitable burden of costs that an Appeal would incur.