A High Court judge has drastically cut claimant costs for a long-running group litigation action where fees had been expected to run into millions.
In Maurice Hutson & Ors v Tata Steel UK Ltd The Honourable Mr Justice Turner ruled ithat two claimant firms could not retrospectively claim more for work already done, and should receive much-reduced sums for the next phase.
The judge said the costs of one aspect of proceedings, labelled as group coordination, was ‘redolent of a degree of financial incontinence’, while claimed costs for various hearings were an ‘indication of an over-generous approach’ to the time required in the next stage of litigation.
In the underlying group action, it is alleged that past employees in the steel industry had been exposed to dust and fumes at work. The claimants, represented by Irwin Mitchell LLP and Hugh James Solicitors, appeared in court last month for a costs case management conference to discuss budget for the completed phase one and forthcoming phase two. Only the claimant costs were still in dispute.
The court heard that the claimants wished to amend their budgeted costs for phase one by around £375,000, on the basis that the defendant made an unsuccessful application to have the question of limitation tried as a preliminary issue – prolonging the case by a year.
Mr Justice Turner said the claimants failed to produce evidence justifying the delay as being a ‘significant development’ (the threshold for retrospectively amending costs). He said it would be a ‘leap of faith’ to make such an assessment, and it remained difficult to justify the variation of a budget for a phase that had been entirely concluded. If the claimants wanted to justify a higher budget they could argue ‘good reason’ at the later assessment stage.
On phase two, the judge took large slices off claimed costs in five disputed areas.
For the case and costs case management hearing, the claimants budgeted for £340,000, based on 1,052 hours of fee-earner time. The judge noted it was ‘oddly low’ that just 47 of these hours represented costs lawyers’ time. The court set the budget for this at £150,000.
Disclosure costs were cut from £1.75m to £750,000 after the judge deemed the estimated 8,110 hours of fee earner time ‘far too high’.
Lead claimant selection costs were whittled down from £670,000 to £300,000. For the lead claimants’ statements of case, lawyers looked for £589,000 and were limited to £200,000.
One of the biggest disputes was over group coordination costs, where claimants expected to spend a further £437,000 in phase two, based on 1,659 hours. The defendant offered just £50,000. The judge set a ‘reasonable and proportionate’ £200,000 for the work, noting the budgeted hours of solicitor work was ‘clearly too high’.