Owen v Ministry of Defence

In group litigation, a claimant whose individual claim succeeds on findings specific to that claim should not ordinarily bear a proportion of generic-trial costs by set-off where the claim would have succeeded without the generic issues. Costs remain subject to the court’s broad discretion, which must be exercised fairly and by reference to all the circumstances. A claimant may recover costs in full despite failing on substantial heads of loss where the failures resulted from a legal issue reasonably argued and from evidence that would have been required in any event. A Part 36 offer is an important consideration, but does not require a costs reduction where fairness and justice point to full recovery.

The claimant succeeded in his individual action against the Ministry of Defence and was entitled to damages of approximately £22,600. Two costs issues remained. The first was whether the defendant could set off the claimant’s proportionate share of the costs of the group litigation’s generic issues against his damages or individual costs. The second was whether the claimant should recover all of his individual-action costs, despite failing on several heads of loss and having recovered less than the amount claimed.

The court also considered the significance of the claimant’s Part 36 offer, the defendant’s Part 36 payment, the application of the Clunis principle, and the general costs discretion under Part 44 of the Civil Procedure Rules 1998.

1. The defendant was not entitled to set off the claimant’s proportionate share of the generic costs against either his damages or his individual-action costs. The overriding question was whether such a set-off would be fair and just. The claimant had established injury, consequential loss and damage caused by negligent treatment specific to his case. He would have succeeded whether or not the generic issues had been litigated. His inclusion in the group litigation was not a matter of real choice and had caused substantial delay.

2. The court’s discretion as to costs under Part 44 of the Civil Procedure Rules 1998 required consideration of all the circumstances, including the extent of success, the parties’ conduct, and any payment or offer. The claimant’s failure on past and future earnings, the Smith v Manchester head, and some causation issues did not make a reduced costs order appropriate.

3. The claimant had been justified in advancing the Clunis argument and in pleading losses which would have been recoverable if that argument had succeeded. The evidence concerning his psychiatric condition and its complex aetiology would have been required in any event for liability and general damages. The failed heads therefore did not significantly increase the costs.

4. The claimant was entitled to recover his individual-action costs in full. The defendant could not be characterised as having won the case in principle, because breach of duty and consequential injury had been established. The claimant’s application for leave to appeal against the ruling on the Clunis issue was refused because there was no realistic prospect of success.