The Supreme Court Costs Office

No. 26 of 2005

Dr. J B Ilangaratne v BMA

4 October 2005

Mr Justice Warren (Sitting with Assessors)

This was an appeal against a Costs Judge's decisions on a number of matters in a three day detailed assessment of the costs payable by the claimant to the defendants following an action which he commenced and fought against them but lost being ordered to pay their costs.

Firstly was the question of proportionality and the Judge held that there were no grounds for interfering with the Cost Judge's very clear holding that the costs were not disproportionate. In addition on the same point the claimant alleged that the defendants had failed properly to engage in mediation or the settlement proposals which might have resolved the dispute without the necessity for such a large expenditure of costs and secondly that he was an impecunious litigant so that it was disproportionate to throw these costs on to him which might result in his losing his home in order to meet the bill.

On the first point apparently there was a full mediation which was not successful and further the defendants paid into court £20,000.00 in settlement of the claimant's claim which as the trial Judge held he very unwisely decided to reject. On the second point the Judge held that whilst CPR 1.1 (the object of dealing with a case justly) certainly applied to process of assessment, it did not follow that the costs of the successful party should be cut down simply because the paying party is impecunious.

The claimant also raised a point pursuant to the decision in Leigh v Michelin Tyres [2004] 2 ALL ER 175. The Costs Judge held this point was raised too late in the day and refused to entertain it a decision which the trial Judge held was well within his discretion and should not be interfered with.

The main part of the Judge's Judgment dealt with the alleged breach of the indemnity principle by the defendants and once again the older case such as Adams v London Improved Motor Builders Limited [1921] 1KB 495 and R v Miller [Raymond] [1983] 3 ALL ER 1056 and the more recent case of Bailey v IBC Vehicles Limited [1998] 3 ALL ER 570 were considered and resulted in a finding in principle in favour of the receiving party.

However, the Judge alerted by his assessors' concerns that the hourly rates claimed in the bill were far higher than they would have expected, remitted that part of the case to the Costs Judge to satisfy himself that such high rates did not in fact breach the indemnity principle.