Claimants v Corby Borough Council

In complex group litigation, the court may make a costs capping order without requiring exceptional circumstances. The order may be mutual and should ordinarily operate prospectively against future costs. The cap should be fixed by an informed, broad-brush assessment, taking account of the constituent elements of the parties’ estimates without treating them as precise forecasts. A contingency allowance may be appropriate. The court may also permit adjustment where unforeseeable circumstances beyond a party’s reasonable control create a genuine need for revision.

The claimants are children alleging that negligent reclamation and regeneration works undertaken by the defendant in Corby exposed their mothers to harmful substances, causing congenital disabilities. Liability and causation were to be determined at a forthcoming generic issues trial, before any individual quantum issues.

The parties agreed in principle that mutual costs capping orders should be made. The court therefore had to determine the appropriate caps, the period to which they should apply, and whether provision should be made for contingencies and later adjustment.

1. Power and necessity. The power to make a costs capping order derives from section 51(3) of the Supreme Court Act 1981 and is reflected in CPR 3.1(2)(m), which permits orders managing the case and furthering the overriding objective. In group litigation, the desirability of keeping costs within bounds means that exceptional circumstances need not be shown. The court has a clear duty to manage the litigation so that costs do not spiral out of control, following the approach in AB v Leeds Teaching Hospitals NHS Trust [2003] EWHC 1034.
2. Structure of the orders. Mutual caps were appropriate, consistently with Tierney v News Group Newspapers Ltd [2006] EWHC 3275. The caps were to apply prospectively from 31 January 2008, in accordance with the approach discussed in King v Telegraph Group plc [2005] 1 WLR 2282. An overall cap, rather than detailed caps for individual cost centres, was sensible because precise prediction of individual heads was impossible and an overall figure preserved flexibility.
3. Assessment. The court should make an informed but broad-brush assessment. Costs estimates should be realistic and made in good faith, but they are not precise calculations. Significant unexplained changes may properly attract scepticism. The court may consider the other party’s estimate as a guide, while recognising that different levels of expertise, charging and necessary work may justify different figures.
4. The claimants’ estimate was reduced by 5 per cent, producing £855,000 before contingency. The defendant’s estimate was reduced by 20 per cent, producing £1,175,000 before contingency, because of concerns including excessive partner time, document work, counsel’s fees and witness statement preparation. A 5 per cent contingency was appropriate.
5. The costs caps were fixed at £900,000 for the claimants, inclusive of VAT, and £1,250,000 for the defendant, exclusive of VAT. The caps applied only to costs up to the end of the generic issues trial. The parties had liberty to apply if unforeseeable circumstances beyond their reasonable control created a genuine need for adjustment.

First-instance decision. The judgment does not state any prior appellate decision in this litigation.