AB & Ors v Ministry of Defence

In group litigation, costs of a successfully determined preliminary issue should ordinarily follow the event. The court should not allocate common costs mechanically by dividing them equally between lead cases where the lead cases address issues relevant to the wider claimant group. Any question of repayment or reallocation following discontinuance is generally best decided when the relevant facts arise. An interim payment on account should represent a reasonable proportion of the costs claimed, allowing for possible reduction on assessment. Permission to appeal may be granted where the case raises issues of substantial public importance, even though the proposed appeal has no real prospect of success.

This ruling followed the court’s substantive judgment on limitation issues in claims brought by veterans against the Ministry of Defence. The claimants sought their costs of the preliminary proceedings and an interim payment. The defendant sought enhanced protection against the consequences of later discontinuance, directions concerning allocation of common costs, and permission to appeal the substantive limitation decision.

The court also considered whether the proposed appeal had a real prospect of success or raised another compelling reason for an appeal.

1. Costs and discontinuance. The claimants succeeded on the limitation issue, including the associated strike-out issue. The usual order was therefore that they recover their costs of the preliminary proceedings on the standard basis. The possibility that a lead case might later be discontinued did not justify reserving those costs or making them costs in the case.
2. The court rejected the defendant’s assumption that each of the ten lead cases should bear one-tenth of the common costs. The number of lead cases was fortuitous, and the limitation issues included generic matters relevant to all 1,011 claimants. Any later question concerning repayment or attribution should be determined on the evidence available when discontinuance occurred.
3. An interim payment on account was appropriate because a successful party should not be kept out of costs clearly due. There was no fixed proportion. Having regard to the estimated costs, the court ordered payment of £7.5 million inclusive of VAT.
4. Permission to appeal was granted under CPR rule 52.3(6)(b). The proposed grounds did not, in the court’s view, establish a real prospect of success. However, the litigation concerned unique historical events, difficult scientific and medical issues, and matters of significant public interest and substantial public importance. Those circumstances supplied a compelling reason for the appeal to be heard.
5. The parties’ agreed stay of further proceedings, including any proposed appeal, until 14 September 2009 was noted. The defendant’s time for filing the notice of appeal was extended to 15 September 2009, or such earlier date as might be agreed or directed.

Not stated in the judgment.