Murray v Oxford University Hospitals NHS Trust

On an appeal concerning assessed costs, an appellate court should interfere with a discretionary costs decision only where the lower court exceeded the generous ambit of reasonable disagreement or committed a serious procedural irregularity.

Under CPR 44.11, mistake, negligence or an error of judgment, without more, does not amount to unreasonable or improper conduct. The court retains a discretion whether to impose a proportionate sanction, even where the threshold is met.

In challenges to an ATE premium, the paying party must provide at least some evidence supporting the contention that the premium is unreasonable. Costs judges should not second-guess underwriting decisions or deconstruct block-rate policies without appropriate evidence.

The defendant appealed an order of Deputy Master Campbell dated 28 March 2018 concerning the assessment of costs arising from a compromised clinical negligence claim.

The appeal challenged the allowance of the claimant’s costs on two grounds: alleged mis-certification of the bill and failure to impose a sanction under CPR 44.11, and allowance of an ATE insurance premium of £50,341.60.

The central issues were whether the errors in the bill amounted to unreasonable or improper conduct, and whether the evidence justified reducing or disallowing the ATE premium.

1. The appeal was dismissed on both grounds. The appellate court’s power to interfere with the discretionary decision was limited. The question was whether the Deputy Master had exceeded the generous ambit within which reasonable disagreement was possible.

2. Applying Gempride Ltd v Bamrah [2018] EWCA Civ 1367, certification of a bill is important and a solicitor owes duties to the court. However, mistake, negligence or an error of judgment, without more, is insufficient to establish unreasonable or improper conduct. The burden lay on the applicant, and any sanction had to be proportionate.

3. The omission of interim payments of £90,000 was properly treated as trifling. The claim for a 100% success fee was not itself a mis-certification because the claimant was entitled to claim the contractual fee and have it tested on assessment. The other errors arose from use of the wrong risk-assessment wording, were not deliberate, and did not mislead or prejudice the defendant.

4. The Deputy Master was therefore entitled to conclude that the conduct did not fall within CPR 44.11. The appeal on mis-certification and sanction failed.

5. The challenge to the ATE premium also failed. The paying party had produced no evidence or comparator showing that a lower premium was available. The evidential burden was not reversed; the defendant had simply failed to provide material supporting its challenge. The court was not entitled to substitute arithmetic speculation for evidence about the insurance market.

6. The principles in McMenemy v Peterborough and Stamford Hospitals NHS Trust [2017] EWCA Civ 1941, Kris Motor Spares v Fox Williams LLP [2010] EWHC 1008 (QB) and Percy v Anderson Young [2018] EWHC 2712 (QB) were consistent with allowing the premium. Costs judges lack the expertise to deconstruct a block-rate policy or assess underwriting risk without suitable evidence. A broad-brush reduction may be appropriate where the level of cover is excessive, but that was not this case.

7. The ATE policy was linked to the CFA, and “basic charges” meant the solicitor’s base costs forming the basis of the success fee, rather than costs recovered from the defendant or costs as assessed. The Deputy Master’s interpretation was correct.

• High Court (Queen's Bench Division): appeal from the order of Deputy Master Campbell dated 28 March 2018. The appeal was dismissed on both grounds.