Griffiths & Ors v British Coal Corporation

When fixing costs for a fast-track process introduced as a variation of an existing claims-handling agreement, the agreed tariff under that agreement is the proper starting point. The court must then consider all the circumstances and make a fair adjustment for differences in the work required. A conventional bottom-up detailed assessment is inappropriate where the parties agreed fixed-sum remuneration in the wider context of the scheme. For live and deceased claims, the appropriate comparator was the agreed tariff for expedited settlements because the fast-track schemes provided an equivalent early exit from the process. The court could use evidence of reasonable time and work as a cross-check, but not to displace the contractual starting point. Proportionality in individual costs assessment had no application to this scheme-wide determination.

The judgment determined the appropriate solicitors’ costs for claims settled under the LOROS and DOROS fast-track schemes in the British Coal Corporation Respiratory Disease Litigation. The schemes operated as modifications of the Claims Handling Agreement (CHA), under which fixed tariffs had been agreed for different routes to settlement.

The issue had previously been considered by Sir Michael Turner. His decisions were appealed and remitted by the Court of Appeal after the court concluded that further evidence should be obtained. The present hearing followed an evidence-gathering exercise, including examination of selected files by the Senior Costs Judge. The central issues were the correct starting point for fixing OROS costs, the relevance of the CHA tariff, the appropriate comparator, and whether adjustments should be made for differences in work and success rates.

1. Approach. The court rejected the DTI’s proposed bottom-up assessment based principally on reasonable time and fee-earner rates. The Court of Appeal’s reasoning was highly persuasive: the CHA tariff had been negotiated on a broad-brush basis, retained contractual effect, and formed the immediate context for the OROS schemes. The CHA tariff therefore had to be used as the starting point, although it was not determinative. All the circumstances had to be considered.
2. Comparator. The appropriate starting point for both LOROS and DOROS was the CHA tariff for expedited settlements, namely £1,041 at 2005/06 rates. OROS provided an alternative early exit from the CHA process. The work involved was materially similar to expedited work, although LOROS cases reasonably required an additional 30 minutes and DOROS cases an additional hour. The higher post-MAP tariff was not appropriate merely because many claims might otherwise have proceeded to MAP.
3. Adjustments. The court declined to make separate upward adjustments for probate difficulties or employment verification. The fixed tariff involved an element of risk, and the expedited rate was already likely to provide fair or generous remuneration for the average case. A modest downward adjustment was made to reflect the greater success rate under OROS, since some claims would obtain payment under OROS although they might have failed after MAP.
4. Proportionality and evidence. The Senior Costs Judge’s assessment was useful as a cross-check, but it did not replace the CHA starting point. The principle of proportionality applicable to conventional detailed assessment did not apply to this scheme-wide exercise.
5. Orders. Costs were fixed at £1,103 for each LOROS claim and £1,192 for each DOROS claim, at 2005/06 rates. The additional £232 payment remained payable in DOROS cases where probate was required.

1. Court of Appeal: The DTI successfully appealed Sir Michael Turner’s earlier determinations of LOROS and DOROS costs. The matters were remitted for rehearing, principally because further evidence should have been obtained.
2. High Court (Queen’s Bench Division): The present court determined the rehearing after further evidence, adopting the CHA expedited-settlement tariff as the starting point and fixing revised LOROS and DOROS costs.