The fine art of discontinuance
A successful Defendant was refused recovery of all their costs when a Claimant discontinued a case during trial due to their error. Laura Harber, Costs Lawyer at PIC reports.
The clinical negligence case of Harrap v Brighton and Sussex University Hospitals NHS Trust  EWHC 1063 (QB) concerned a claim for damages arising from the Defendant’s failure to arrange a cardiology review following the discovery that he had a patent foramen ovale, which could have prevented the Claimant’s subsequent stroke in October 2012. The Defendant’s omissions in relation to witness evidence led to new evidence emerging from one of their factual witnesses, Professor Hildick Smith, during cross-examination, which proved fatal to the Claimant’s case and led to him discontinuing the claim on day 3 of the trial.
Following discontinuance, the starting point in relation to costs is CPR 38.6(1) which provides that, “Unless the court orders otherwise, a claimant who discontinues is liable for the costs which a defendant, against whom the claimant discontinues, incurred on or before the date on which the notice of discontinuance was served on the defendant“. The burden is on the Claimant to show good reason to depart from that position. The guiding principles are drawn from the authorities, set out in Teasdale v HSBC Bank PLC  EWHC 612 and as approved in Erica Brookes v HSBC Bank  EWCA Civ 354. Before the presumption is displaced there must be a finding that there has been a change in circumstances to which the Claimant has not contributed and some form of unreasonable conduct on the part of the Defendant. It is clear that this threshold is high – see Nelson’s Yard Management Co v Eziefula  EWCA Civ 235.
In Harrap, the Claimant accepted that he should bear the costs of the action but argued that this should be only up to the date of exchange of witness statements. He submitted that, from that date, the Defendant should bear both sides’ costs as the new evidence, proving fatal to the Claimant’s case on factual causation, from one of the Defendant’s factual witnesses emerged for the first time during his cross examination at trial. This new evidence amounted to a change of circumstances, providing a good reason for the Court to depart from the general default position. The change in circumstances was not of the Claimant’s making but due to the Defendant’s unreasonable conduct in failing to proof the witness adequately.
The Defendant argued that the claim was always doomed to failure from the outset for a host of reasons and the evidence only brought forward the inevitable defeat with associated costs consequences. Therefore, the normal order for costs should apply as the Claimant should not be permitted to avoid the inevitable payment of costs by relying on irrelevant evidence emerging from cross examination.
Mrs Justice Lambert DBE, in her Judgment, considered the costs consequences of the action. She found that there had been a change of circumstances of the consequence of the new evidence at trial; that the new evidence had a direct bearing on the Claimant’s case as its effect was to shut down the Claimant’s case on factual challenge; and the Claimant or his team had not contributed to the change of circumstances with the Defendant’s failure to set out the full story being unreasonable. Therefore, she concluded that on the unusual facts of this claim, the default position following discontinuance that the Claimant should bear the entirety of the Defendant’s costs should be displaced and accepted that the threshold for rebutting the presumption in CPR 38.6 had been reached in this case.
However, although the Claimant argued that costs should only be recovered up to exchange of witness statements, Mrs Justice Lambert disagreed and ordered that the Claimant should bear the costs in the usual way up to the date of service of the cardiologist’s report in December 2017, as opposed to exchange of witness statements in May 2017, with no order for costs thereafter.
Although this case provides an example of a situation where the presumption in CPR 38.6 is displaced, what is clear is that the threshold remains high and that it is very much dependent on the facts and circumstances of the particular claim. Mrs Justice Lambert, in her judgment, alluded to the “unusual facts of this claim” so if you are a Claimant, the feeling is that it will be an uncommon situation whereby that presumption is rebutted, but never say never!
This case shows that the cost consequences of discontinuing a claim are not always straight forward.
If you have any queries regarding discontinuance, please do not hesitate to contact PIC for assistance.