Burgess v British Steel Plc & Anor

Where a claimant fails to beat a payment into court, the usual consequence is that the claimant pays the defendant’s costs from the relevant date, normally 21 days after payment. The court retains a broad discretion to make a different order where there is good reason. That discretion must be exercised on the circumstances of the case, including the conduct of the litigation. An unpursued allegation of malingering in a medical report may justify disallowing costs specifically attributable to that allegation. It does not, without more, justify depriving the defendant of all costs after payment where the claimant continued the action to recover more damages and was aware of the litigation risks.

The claimant brought a personal injury action arising from a road traffic accident. Liability was admitted, and the trial concerned the extent and causation of physical and psychological injury and the resulting financial loss.

The defendants paid £220,000 into court. The judge awarded £161,592.22 including interest. He ordered the defendants to pay the claimant’s costs up to the payment date, with no order as to costs thereafter, because a defence medical report had alleged malingering but was not relied upon at trial.

The defendants appealed the costs order. The central issue was whether those circumstances justified departing from the usual payment-in rule.

1. Appeal allowed unanimously. The claimant had failed to beat the payment into court. The defendants were therefore ordinarily entitled to their costs from 21 days after payment.
2. The governing principle, reflected in the Rules of the Supreme Court and supported by Findlay v Railway Executive and Jones v Jones, is a prima facie rule rather than an inflexible rule. The court may depart from it where the circumstances provide good reason.
3. The relevant discretion is broad and may take account of events after payment, including the way in which the case and trial were conducted. However, the claimant had the report alleging malingering before deciding whether to accept the payment and was pursuing the action to obtain more damages. The allegation did not increase the financial risk created by rejecting the payment.
4. The allegation was subsidiary to the principal issue of causation and quantum. The judge could properly have disallowed costs attributable to Dr Jawad’s report or to the malingering issue. He was not entitled, on these facts, to deprive the defendants of all costs after payment. The approach was outside the permissible range of discretion. The principle in In Re Elgindata Ltd (No.2) supported treating the defendants as successful parties notwithstanding their failure to establish a particular allegation.
5. Ford v GKR Construction and Others was distinguishable because subsequent evidence had fundamentally changed the nature of that case. The order was set aside. The defendants recovered their costs from 21 days after payment, but not costs incurred in relation to Dr Jawad or the malingering issue.

• Court of Appeal (Civil Division): allowed the defendants’ appeal from the costs order made by Toulson J on 30 November 1998. The defendants recovered costs from 21 days after payment into court, subject to exclusion of costs relating to Dr Jawad and the malingering issue.