Group action firms 'should sort out interim costs'

Solicitors involved in group litigation should sort out interim costs between themselves rather than asking the courts to intervene in the matter and risk lengthy satellite litigation, a High Court judge has said.

In a preliminary ruling in Giambrione v JMC Holidays - involving 652 claimants who fell ill with salmonella poisoning on a trip to Majorca in 1997 - Mr Justice Morland urged firms not to deal with costs in tranches, but to wait for detailed assessments at the conclusions of cases.

The issue arose when Irwin Mitchell, acting for the claimants, appealed against elements of a decision by Costs Judge Campbell on the first tranche of costs, after he ruled that some parts of the bill appeared to be disproportionate.

The total bill was for 1,085,000.

In the appeal, Mr Justice Morland said that a whole bill could fail the proportionality test even if evidence of disproportionate claiming did not 'jump off the page', and could therefore be subject to the dual test of necessity and reasonableness.

However, he admitted that deciding proportionality in a first tranche bill was 'problematic' and urged firms to arrange reasonable interim costs to prevent the situation from arising.

'In my judgement, in almost all group litigation cases there should be no need for any detailed assessment of costs until the conclusion of the group litigation,' he said.

Irwin Mitchell partner Stuart Henderson said the law relating to proportionality was in danger of hindering access to justice, but added that he was confident the work undertaken in this case would be assessed as necessary and reasonable.

'By that stage we will have concluded claims for all of our clients and expect to have recovered several million pounds in compensation in what has been a groundbreaking group action claim,' he said.

But Peter Stewart, head of aviation and travel at Field Fisher Waterhouse, which acted for JMC, said: 'This ruling means that claimant firms will have to start looking at conducting these sorts of holiday claims in the most efficient way possible, and not using them as a money tree.'

Paula Rohan