Legal Cost Specialists

Morgan v The Spirit Group Ltd

An interesting example of losing while winning was seen in the Court of Appeal’s judgment in Morgan v The Spirit Group Ltd [2011] EWCA Civ 68.

In a personal injury claim damages were claimed at around £40,000. The matter was allocated to the multi-track. At trial the judge awarded damages of £13,419.03 inclusive of interest for general and special damage. The Claimant presented a bill of costs claiming £99,206.29 inclusive of VAT and disbursements. The litigation had been conducted under a conditional fee agreement with a 100% success fee.

The trial judge, having heard costs arguments, considered that the claim had been, in reality, “a little fast track personal injury case which has been turned by the solicitor conducting the case into what is (if the expression be understood) a federal case” and that costs should be looked at as if the case had been allocated to the fast track. He was apprehensive about the expense of a detailed assessment of costs and, decided to take a robust course, which he set out at the conclusion of his judgment as follows:

“In order, therefore, to save the parties from themselves.. seems to me that the appropriate way for me to do justice in respect of the costs is to look at this case principally as what should have been a fast track case, and to look at the damages recovered – £13,419 – and to consider what it is proportionate to expect the defendant to pay. Now, absent the question of contingent fee agreements, I would have thought the very limit of what is reasonable for a defendant who has conducted the case properly to pay to a claimant by way of costs in a straightforward case such as this – the absolute limit would be £20,000 (it is probably more like £15,000). Having regard to the fact that there are some contingent fee agreements, and not with a view to satisfying the increase which they may incur, but simply having regard to the fact that they are there, it seems to me that substantial justice is done in this case if I make an order that the defendant shall contribute the sum of £25,000 to the claimant’s costs. That is the order which I make, which, as I say, is also to cover today’s hearing.”

The Claimant appealed. The Court of Appeal allowed the appeal to the extent that they decided the trial judge had failed to properly consider the costs on an item-by-item basis, as required even on a summary assessment. The costs order made by the judge, in so far as it fixed a figure for the Defendant’s contribution to the Claimant’s costs, was set aside with a detailed assessment of the costs ordered.

However, the Court ruled that there was no reason to interfere with the judge’s determination that the costs of the case should be approached as if it had been a fast track case (following Drew v Whitbread [2010] EWCA Civ 53) and the matter would go to the costs judge for detailed assessment on that basis. It will therefore be interesting to see if, on a robust detailed assessment, the Claimant recovers even as much as £25,000.

More damning, was the decision about the general conduct of the case. The claim had been handled by a solicitor who also happened to be the Claimant’s husband. The Court of Appeal summarised the trial judges’ views:

“the judge had made some very damning findings about the claim and the way in which the litigation had been conducted. As well as determining that it was a straightforward minor personal injury action that one would normally have expected to be allocated to the fast track, damages plainly being within the limit for that track, his observations included that the claim was ‘a “greedy” claim’, that the claimant’s view of the appropriate measure of damages was ‘wholly untenable’ and aspects of the damages claim ‘astonishing and wholly unsustainable’ and ‘truly breathtaking’, that ‘every stage [in the history of the case] involves enormous expenditure’, and that the ‘oppressive conduct of this case’ carried on even in relation to the costs issue.”

The Court of Appeal rejected the criticisms levelled against the trial judge by the Claimant in relation to such conclusions:

“The judge had formed his own view of the facts, with the benefit of having experienced the litigation at first hand in the form of the quantum trial and the subsequent costs hearing and there is no material upon which to say that he was not entitled to come to the views that he did, which were by no means confined to a concern that the claimant recovered less than she had hoped to recover. It was well within his discretion to take his conclusions on these matters into account in determining what order should be made as to costs. … The…observations of the judge in his costs judgment will also remain relevant for the costs judge.”

Something of a Pyrrhic victory for the Claimant and her solicitor husband then.

1 thought on “Morgan v The Spirit Group Ltd”

  1. Agreed, though it is striking that the Court of Appeal had such a command of the costs system that they appear to have believed that the “fast track” ruling would have a limiting effect on the costs as a whole, rather than just the costs of a trial.

Leave a Comment

Your email address will not be published. Required fields are marked *

Post a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Scroll to Top