Morton v Portal Ltd

A claimant’s preference for periodical payments is a factor, not a determining right. The court must consider all the circumstances and decide which form of award best meets the claimant’s needs, including the scale and security of payments and both parties’ preferences.

In costs matters, a reduced settlement value does not itself establish exaggeration. Exaggeration must involve conduct meriting criticism, and any departure from the usual rule that costs follow the event should reflect the causative effect of that conduct. Where no trial evidence has been heard, detailed assessment may be the proper forum for questions of reasonableness, proportionality and issue-specific costs.

The claimant suffered catastrophic spinal injuries in a workplace accident. Liability had been agreed at 75% in the claimant’s favour, and the remaining disputes concerned the assessment of damages, the form of future-care payments, costs and interest.

The parties agreed most heads of loss before the damages hearing. The court was asked to determine whether future care should be paid by lump sum or periodical payments, whether the claimant’s costs of the earnings claim should be treated separately because the original claim had been substantially reduced, and the date from which interest should run.

1. Periodical payments. The court made a periodical payments order. Under section 2(1) of the Damages Act 1996, CPR 41.7 and Practice Direction 41B, the court must consider whether to make such an order and must have regard to all the circumstances, particularly the form of award that best meets the claimant’s needs. The claimant’s preference is only one factor. A claimant of full age and capacity has no trump card, and party agreement does not remove the court’s statutory obligation to consider the order or the security of continuity of payment under section 2(3) ([15]–[22]).
2. Costs. The claimant was the overall winner. The fact that the earnings claim had been reduced substantially in negotiation did not, without more, establish exaggeration under CPR 44.3. Exaggeration requires conduct meriting criticism. The admitted tax irregularities and missing business records did not justify an adverse finding on the documents alone, particularly where relevant expert evidence supported the claimant’s case ([48]–[55]).
3. The court declined to make an issue-based costs order for the earnings claim. In the absence of a trial and oral evidence, the costs judge was better placed to assess whether particular elements were unreasonable, disproportionate or unfounded. A broad-brush order risked double recovery or double penalisation at detailed assessment ([57]–[60]).
4. Interest. Exercising the discretion under CPR 40.8, the court directed that interest on the lump sum should run from 19 April 2010, balancing the claimant’s delay in receiving money against the windfall that would have resulted from backdating judgment to November 2009 ([61]–[63]). The parties subsequently agreed the final order, including interest on £110,000 from that date ([65]).

First-instance judgment. The proceedings were commenced in 2006, liability was agreed in 2007, and judgment was entered for 75% of damages to be assessed. The present judgment determined concluding issues concerning damages, costs and interest.