AB & Ors v British Coal Corporation (Rulings appended)

Where money is paid under a court order later set aside, the payer may recover the overpayment with interest from the date of payment. A related agreement may also contain an implied term requiring interest where necessary to avoid inconsistency with the order and to give the agreement efficacy. Interest is simple at the commercial rate unless otherwise agreed. A late costs issue may be refused where reopening closed claims would impose disproportionate administrative burdens and prejudice the litigation.

The judgment determined three issues arising from the British Coal Respiratory Disease Litigation. First, the Department sought interest on costs overpaid to claimants’ solicitors after earlier costs orders were set aside and lower tariffs were finally determined. The issues were whether the payments were made under compulsion or agreement and whether interest was recoverable.

Second, the court considered cut-off arrangements for probate evidence in DOROS claims. Third, claimants’ solicitors sought recovery of certificate costs as DOROS disbursements at a late stage. The court considered the appropriate safeguards and whether the disbursement issue should be reopened.

1. Interest. The Department was entitled to simple interest at 1% over base rate from the date of each overpayment until repayment. Payments made before 21 December 2005 were made under the continuing compulsion of court orders later set aside. Thereafter, the Department continued paying under the parties’ March 2005 agreement.
2. A term was implied into that agreement requiring interest on overpayments and underpayments. The term was necessary to avoid inconsistency with the court orders and to give the agreement efficacy. There was no sufficient threat of compulsion after the orders had been set aside.
3. Interest ran from each payment because the debt and cause of action arose immediately upon payment. Compound interest was refused. Section 35A of the Supreme Court Act 1981 supported an award of simple interest.
4. DOROS probate cut-off. The court allowed a three-month period after notification of qualification for claims re-entering the DOROS process. An application for probate submitted at least 30 days before the cut-off, with evidence supplied within 14 days after it, would satisfy the cut-off. A death within 90 days before the cut-off justified a further 90-day extension. A proposed blanket six-month extension was refused.
5. DOROS disbursements. The court refused to reopen the late issue. Reconsidering about 80,000 closed claims would create disproportionate administrative work, prejudice the progress of unsettled claims and unfairly reward delay.