Hullock v East Riding of Yorkshire County Council

Costs consequences for exaggerated claims will hurt more under Jackson's proposed reforms.

Once again the question of who was the winner in personal injury litigation was considered by the Court of Appeal in Hullock v East Riding of Yorkshire County Council [2009]. In December 2004 the claimant tripped on a pavement and suffered injuries. She had a fractured hip requiring insertion of a plate and two weeks in hospital. Liability was conceded within 4 months of the claim being notified to the defendant. In November 2005 the claimant served a schedule for past and future care amounting to £93,000. Proceedings were issued. Eventually after surveillance evidence and a joint orthopaedic report the claimant revised the schedule claiming just £6,500 of past care and abandoning the future care.

The parties agreed to settle for £15,000 and proceed to trial on costs only (the parties had previously agreed an interim payment of £15,000 – the claimant had valued general damages at £14,000). The judge ordered the defendant to pay 50% of the claimant’s costs. The defendant appealed. Lord Justice Patten reviewed the case of Hall v Stone [2007] and Painting v Oxford University [2005]. He dismissed the suggestion that the defendant’s failure to make use of an effective part 36 offer early in the proceedings was an answer to the argument that most of the costs were attributable to the disputed care claim.

He concluded at paragraph 33 :

This is therefore in my judgment a case in which the exaggerated and unsuccessful claim for special damages had real costs consequences for which the claimant should be made liable. Although the appeal is against the exercise of a discretion, I think that Mr Cox is right in his submission that the Recorder failed properly to recognise and give effect to the importance of his finding about the defendant’s conduct and was wrong to regard it as only a partial answer to the claimant’s case based on her apparent success in the action. The real winner was the defendant. Had the disputed element of special damages not been included in the November 2005 schedule, the claim would have been settled without the need for proceedings. Instead of an agreed interim payment of £15,000, the money would have been paid to the claimant in satisfaction of her claim and any further costs would have been avoided.

He allowed the defendant’s appeal and ordered that they pay the claimant’s costs up to the date of their interim payment of £15,000 but that the claimant pay the defendant’s costs thereafter. The impact of this order on the claimant herself may be negligible if she had in place an ATE insurance policy and a CFA agreement. She may not pay a penny of costs out of her compensation. However of course if the proposals put forward by Lord Jackson in his final report on costs are implemented then this type of order will have significant impact on claimants, not just on their solicitors and insurers.

Thanks to Costs Lawyer Matthew Harman who contacted me about Wildlake v BAA Ltd [2009].

What do you think? Was the original order a proportionate way to deal with an exaggerated claim or did the Court of  Appeal get it right? Add a comment below.

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