Hullock v East Riding of Yorkshire County Council

In a costs-only personal injury appeal, the fact that a claimant obtains the damages ultimately agreed does not by itself determine the costs order. Success is the starting point under CPR 44.3, but the court must identify the real issues in dispute and consider the parties’ conduct and partial success.

Where liability is admitted and an exaggerated claim for care is the central issue, its abandonment or failure may make the defendant the real winner on that issue and justify awarding the defendant the costs attributable to it. An interim payment is not an offer to settle and does not cap later costs exposure. A defendant seeking that protection must use the Part 36 procedure.

The claimant suffered serious injuries after tripping on a pavement. Liability was admitted, subject to contributory negligence, and an interim payment of £15,000 was made. The claimant later pursued a substantial claim for past and future care, supported by medical and witness evidence, but surveillance and joint expert evidence led her to reduce the past-care claim to £6,500 and abandon future care.

The action was settled for £15,000, after the agreed reduction for contributory negligence, and the parties proceeded to trial on costs. The county court ordered the defendant to pay 50 per cent of the claimant’s costs. The defendant appealed, arguing that the recorder had misidentified the successful party, failed to take proper account of the interim payment, and gave insufficient weight to the exaggerated care claim.

1. Appeal allowed. The recorder’s discretion under CPR 44.3 had to be exercised by identifying the real issues in the litigation and considering the factors in the rule, including conduct and partial success. The presumption that the successful party receives its costs is only a starting point.
2. An interim payment, even when agreed, is a payment on account of damages and is not an offer to settle the claim. It cannot be treated as a payment into court or a Part 36 offer for costs purposes. A defendant wishing to limit its costs liability by reference to an interim payment must use Part 36. The payment was nevertheless relevant to identifying the issues genuinely remaining for trial, since it indicated that general damages were not materially in dispute.
3. The real dispute concerned the claimant’s substantial claim for care and assistance. The claimant ultimately reduced the past-care claim substantially and abandoned future care after surveillance and joint medical evidence showed that the disability asserted to the experts had been exaggerated and that continuing care was unnecessary.
4. The distinction drawn in Painting v Oxford University [2005] EWCA Civ 161 and Hall v Stone [2007] EWCA Civ 1354 was material. A defendant may be the real winner where exaggeration is an important issue with costs consequences. The mere recovery of less than the amount claimed does not, without more, make the defendant the victor.
5. The recorder failed to give proper weight to his finding that the exaggerated care claim was the central issue and wrongly treated it as only a partial answer to the claimant’s apparent success. The defendant was the real winner in the litigation. The defendant was ordered to pay the claimant’s costs up to 13 April 2006, and the claimant was ordered to pay the defendant’s costs thereafter. The appeal costs were summarily assessed at £8,235.

• Court of Appeal (Civil Division) — [2009] EWCA Civ 1039: allowed the defendant’s costs appeal and substituted an order under which the defendant paid the claimant’s costs up to 13 April 2006, with the claimant paying the defendant’s costs thereafter.
• Kingston-upon-Hull County Court — the recorder ordered the defendant to pay 50 per cent of the claimant’s costs on the standard basis.