Group litigation cap

A B and others v Leeds Teaching Hospital NHS Trust [2003] EWHC 1034 QB

The Woolf report encouraged the court to take control of costs particularly in multi-party actions. Annexed to the report was a paper by A A S Zuckerman which under the heading ‘Prospective Budget Setting’ read: ‘One option to be considered is replacing retrospective taxation ( assessment) with prospective budget setting. Under this regime budgets would be set in advance so that the process would have to conform to budgetary constraints, rather than the costs following the process as at present.’ The paper was not well received by the profession, but perhaps its time has now come. The appropriately named Mr Justice Gage took up the challenge in this case. Having referred to s51 of the Supreme Court Act 1981, to the various parts of the CPR which deal with costs, and giving full effect to the overriding objective of the CPR, he was not only satisfied that the court has power to make a costs cap order, but that it should in fact do so in group litigation, in which the desirability of ensuring that costs are kept within bounds makes it unnecessary for the court to require exceptional circumstances to be shown before exercising its discretion to make a costs cap order, as has been suggested in the administrative field. After considering the four component parts of solicitors’ costs, experts fees, counsels’ fees and other disbursements in the light of a probable recovery of £10–15m, the judge imposed a costs cap on the claimants up to the end of the trial in the sum of £500,000.