Shaw v Medtronic Corevalve LLC & Ors

The fact that claims have been struck out or were unsustainable does not, by itself, justify indemnity costs. Novel legal arguments do not automatically warrant that order either. Failure to follow a pre-action protocol and litigation conduct may be relevant, but they must be assessed with all the circumstances. The court should consider the nature of the claims, the parties’ conduct, settlement offers and any other unusual features in the round. Even where a case comes close to warranting indemnity costs, the appropriate order may remain assessment on the standard basis.

The judgment concerned the basis on which the claimant’s costs were to be assessed after the proceedings had effectively ended. Service of the claim form on the First and Third Defendants out of the jurisdiction had been set aside. The claim against the Second and Fourth Defendants had been struck out, and the claimant had discontinued against the Fifth Defendant. The claimant was ordered to pay the defendants’ costs.

The defendants sought assessment on the indemnity basis. The claimant contended for the standard basis. The court considered the claimant’s failure to follow the pre-action protocol, the nature and sustainability of the claims, the conduct of the litigation and settlement offers.

1. Order made. The defendants’ costs were to be assessed on the standard basis. The case was close to one warranting indemnity costs, but the overall circumstances did not justify that order.
2. The fact that claims had been struck out or held to be unsustainable was insufficient, without more, to justify indemnity costs. The same applied to the claimant’s reliance on novel points of law.
3. The failure to follow the pre-action protocol was a relevant factor. It was not determinative. The claimant had known which valve was involved and had obtained the investigation protocol ten months before issuing the claim form.
4. The nature of the claims supplied several unusual features. No cause of action had been pleaded against the Second Defendant. The Fifth Defendant did not exist when the operation occurred. The Third, Fourth and Fifth Defendants had no involvement with the operation and were not manufacturers, producers or suppliers of the valve. The claim against the Third Defendant had also been served out of the jurisdiction on the basis of a misrepresentation concerning succession in title. The Particulars of Claim referred to the successful First Action without addressing the resulting defence of satisfaction.
5. The late amendment application and delayed discontinuance were relevant features of the claimant’s conduct, but neither independently justified indemnity costs. The court also noted conduct favourable to the claimant, including the defendants’ eventual agreement that no order should be made as to the costs of the disclosure application.
6. The settlement offers were not Part 36 offers. They were relevant to the overall assessment, but would have included claims which the claimant indicated she wished to pursue against the Second Defendant and which had not been determined on their merits.
7. Considering all matters in the round, the appropriate order was standard-basis assessment.

Not an appeal. The judgment recorded earlier procedural orders made in the same proceedings, including setting aside service out of the jurisdiction, striking out claims against two defendants and discontinuance against another defendant.