Rallison v North West London Hospitals NHS

On an interim costs application, the court must estimate a reasonable sum likely to be recovered on detailed assessment or compromise. The payment need not represent the irreducible minimum of recoverable costs.

The court should first consider globally whether the costs claimed are disproportionate to the issues, case complexity and likely recovery. If they appear disproportionate, it should then take a broad-brush view of the necessity of individual items, while allowing for uncertainty and an appropriate margin for error.

The negligence claim settled for £450,000 together with reasonable costs, subject to detailed assessment if not agreed. The claimant sought an interim payment of £574,000 on account of costs; the defendant offered £250,000.

The claim concerned delay in diagnosing and treating a spinal abscess. The court was required to determine the reasonable interim payment pending assessment, without making a final determination of the costs recoverable.

1. The court adopted the guidance in Excalibur Ventures LLC v Texas Keystone Inc [2015] EWHC 566 (Comm). A reasonable interim payment is an estimate of likely recovery, subject to an appropriate margin for error. The court must consider all relevant circumstances, including the prospects of recovering the costs claimed, the difficulty of assessment, the means of the parties, the imminence of assessment and the risk of overpayment.
2. For claims commenced before 1 April 2013, the former standard-basis approach under CPR 44.4(2) required only proportionate costs to be allowed, with doubts resolved in favour of the paying party. That provision informed the interim assessment, although the court was not finally determining recoverability.
3. The court should first decide whether the total costs claim appears globally disproportionate. If so, it should assess the necessity of individual items using a fairly broad-brush approach. The claim of approximately £1.1 million was disproportionate when compared with the case’s complexity and the £450,000 settlement.
4. The claimed preparation time appeared excessive, including substantial solicitor and counsel hours for a case producing a three-file trial bundle. The claimant’s proposed £574,000 was therefore rejected.
5. The defendant’s figure of £250,000 was increased to £306,763 to reflect the likely recovery of the after-the-event insurance premium. The defendant was ordered to pay the claimant £306,763 on account of costs.