Punishment by way of costs sanction

Reluctant to delve into the minefield of costs and related sanctions, other than to point out matters of funding, the judicial system is founded on the expectation that litigants and the parties representing them conduct themselves in a reasonable, sensible and accountable manner.

Should a party undermine this expectation then, pursuant to Civil Procedure Rule 44.2, the court may be minded to assert its discretion and impose what has coined costs sanctions on the offending party. This issue was raised in Chapman v Tameside Hospital NHS Foundation Trust [2016] and concerned the conduct of the parties in the pre-action stage of the litigation process.

This case initially dealt with the injuries sustained by the claimant. When a judgment was awarded and costs were being addressed, the judge referred to CPR 44.2 which provides the court with discretion to take the party conduct into account when determining a cost liability. In this case, it was the defendant’s trial conduct which was the subject of the court's attention and as their conduct was being called into question (its lack of disclosure) for the claimant's claim to be successful, the first to establish that the incident occurred, and subsequently illustrate that it was the defendant’s negligence which had caused the incident and that cause resulted in their failure to take reasonable precautions against it.

In their pre-action correspondence, the defendant did state they had “no documents” to disclose. Whilst it was not the defendant’s responsibility to prove that the claimant’s injury had occurred, the judge found in this case that the defendant had failed to demonstrate that it had complied with its pre-action obligations.

The judge referred to the pre-action protocol for personal injury claims, which requires defendants to reveal any documentation pertinent to the material case. At the time of the first correspondence, the defendant had provided no such documentation and, in stating that there was no documentation to provide, made it reasonable for the claimant not to request pre-action disclosure.

Despite the defendant succeeding in its defence, the court found that its conduct ultimately typified the behaviour that cost sanctions were intended to deter. Further, the court highlighted that this behaviour undermined the “overriding objective” set out in CPR 1.3, which conveys a duty on the parties in proceedings to ensure they act efficiently proportionate therefore furthering the overriding objective.

The court accepted the claimant’s contentions, in that, had some vital available documentation been provided at the outset, the defendant would have been withdrawn and would have saved valuable time and money for everyone involved. Therefore, because of the defendant’s actions the litigated case was unnecessarily prolonged, and the judge felt this position should be reflected by an appropriate costs sanctions against the meritorious defendant.

Thus, the judge applied CPR 44.2, which afforded him an ‘unqualified discretion’, and concluded that, while the fixed costs rules should be considered, they were not binding on the present determination. The judge concluded that, by subtracting the claimant’s pre-disclosure costs of £950 from the total base legal costs of £3,790, it could be determined that the remaining £2,840 was the direct result of the defendant’s delay in disclosing the relevant documentation and the defendant should, therefore, be responsible for covering these costs, as well as additional costs for a report provided in the case itself.

This case is notable for two reasons. First, it reiterates the importance of reasonable trial conduct and establishes that ‘winning’ the case does not give a party licence to behave contrary to the overriding objective. As confirmed in this case, unreasonable behaviour can have substantial cost consequences for the defaulting party.

Furthermore, perhaps, more importantly, this case introduced the notion that CPR 44.2 could be used to override, or at least circumvent, the limiting nature of fixed-cost trials in cases when appropriate, meaning that costs can be awarded in a way that adequately reflects the nature and circumstances of the case at hand.