Appeal No: QB/2015/0490
Case No: HQ14P05147
Neutral Citation Number: [2016] EWHC 1040 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 04/05/2016

Before :

MRS JUSTICE SLADE DBE
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Between :

	(1) AN 

(2) CN 
(through his litigation friend THE OFFICIAL SOLICITOR) 

(3) GN
(through his litigation friend THE OFFICIAL SOLICITOR)	

Claimant/ Appellant	
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	Poole Borough Council 	Defendant/Respondent	
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Ms Elizabeth-Anne Gumbel QC and Iain O’Donnell (instructed by Leigh Day) for the Claimant/Appellant
Mr Paul Stagg (instructed by Wansbroughs Solicitors) for the Defendant/Respondent

Hearing dates: 8 April 2016

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Judgment
MRS JUSTICE SLADE DBE : 

1.	This is a ruling on outstanding issues on costs following the costs hearing on 8 April 2016 differences between the parties became evident on the drawing of the order. The disputed issues had not been raised at the hearing. Following the hearing there were email exchanges between counsel and the court. Mr Stagg, counsel for the Defendant, wished to include, in accordance with the judgment of the Court of Appeal in Lockley v National Blood Transfusion Service [1992] 1 WLR 492, an order that the Defendant should be entitled to set off its costs of the interlocutory hearing against any damages or costs which the Claimants may recover in the litigation. Counsel contended that there was no good reason not to make the order in this case. He wrote: 
“It would be unfair if the defendant could not set off 75% of the costs incurred below against the 25% of costs the claimants incurred below and their costs of the appeal without having to incur the expense of an application for permission to enforce the order.”
2.	Ms Gumbel QC objected to the Defendant’s proposed draft on the basis that they were asking for 75% of the costs they recovered at the hearing before Master Eastman to be offset against CN and GN’s (‘the Claimants’) costs or damages when, it was said, these costs related to a great extent to those awarded against the Claimants’ mother, the then first Claimant. Counsel contended that it would not be fair to the children and nor was it understood to be the order made for all these costs to be offset against the costs and damages recoverable from the Defendant by the Claimant,  children. 
3.	Since it was apparent that a dispute had arisen between the parties on two issues which had not been raised at the hearing, counsel were invited to make further submissions in writing. 
4.	There is now no dispute over the making of a Lockley Order. The remaining difference is over the percentage of the costs the Defendant is entitled to offset against costs and any damages found to be due to the Claimants. 
5.	It was only after the Lockley issue was raised after the hearing that its effect on the costs of the hearing before Master Eastman came into sharp focus. 
6.	In response to the email from the court of 18 April 2016 inviting submissions on the issues, Ms Gumbel QC for the Claimants submits that only 25% of the 75% costs of the hearing before Master Eastman which I attributed to Claim 1 brought by the Claimants and their mother and which was struck out by him relates to them. It was submitted that the balance of 50% relates to the former First Claimant, their mother. Accordingly, Ms Gumbel QC contends that the Lockley offsetting should be in relation to 25% not 75% of the costs before Master Eastman of Claim 1 brought by the Claimants and the original First Claimant, their mother, which was struck out. 
7.	Mr Stagg submits that the Defendant is entitled to 75% of its costs before Master Eastman. To the extent that it recovers those costs from the original First Claimant, the Claimants’ mother, it cannot recover them a second time from them, whether by offset or by other means. Mr Stagg submits that if the court agrees with the stance taken by the Defendant as to the wording of the Order, the Claimants should not be entitled to recover any costs arising from the debate which has taken place after the hearing on 8 April 2016. 
8.	Once the Lockley issue of offsetting any of the costs of the hearing before Master Eastman recoverable by the Defendant against costs and any damages due to the Claimants arose it became necessary to consider the proportion of those costs fairly to be attributable to them. Under both parties’ Draft Order, Paragraph 3(1) of the order of Master Eastman dated 2 October 2015 is to stand so far as it relates to the claim by AN, the original First Claimant. Paragraph 3(1) provides: 
“The Claimants shall pay the Defendant’s costs of and occasioned by these proceedings subject to: 
(1) A detailed assessment of those costs on the standard basis if not agreed.”
9.	So far as the claims made by the Claimants are concerned, Paragraph 3 of the Order of Master Eastman was set aside. The original First Claimant remains liable to pay the costs of her claims in the proceedings before Master Eastman. The discussion in the costs hearing before me on 8 April was of the apportionment of costs between Claim 1 and Claim 2 before Master Eastman. No consideration was given to the proportion of the costs attributable to AN on one hand and to CN and GN on the other in respect of Claim 1. 
10.	In my judgment enabling the Defendant to offset the entirety of 75% costs of the hearing before Master Eastman against the sums to which CN and GN are and may become entitled would not meet the justice of the case. The liability for costs arises from Claim 1 which was the only claim made by the original First Claimant. Whilst CN and GN also pursued Claim 1 they also pursued Claim 2. The Claimants should not be exposed to offsetting in respect of all the 75% liability for the Defendant’s  costs of the hearing before the Master. Weighing the balance of importance of Claim 1 between the original First Claimant and CN and GN, in my judgment the Lockley offset against sums due to the Claimants should apply to 40% of the 75% costs of the hearing before Master Eastman. The issue of offsetting does not affect the overall liability of the Claimants for costs. The liability of the original First Claimant remains in place. Following the hearing on 8 April 2016 CN and GN are liable for no more than 75% of the costs of the proceedings before Master Eastman. 
11.	The Defendant t asked for a Lockley order which has necessitated further work by the parties. The request should have been made at the hearing on 8 April 2016. The court has not agreed with the Defendant’s stance on the wording of the Order. Nor has it agreed entirely with that suggested by the Claimants. In all the circumstances the Defendant is ordered to pay to the Claimants one half of their costs of correspondence after 8 April 2016 concerning the drawing of the court’s Order. Payment is to be made within 28 days of the seal date of the Order. 
12.	Counsel are requested to draft an Order in accordance with this judgment, removing the name of the mother from existing paragraph 1 and re-dating the draft.