Court Imposes a Costs Cap

In a ground-breaking decision in the High Court, a costs cap has recently been ordered under the Civil Procedure Rules (CPR). The costs cap is to apply both retrospectively and prospectively up to the end of the trial. The order was made in the Nationwide Organ Group Litigation (A B & Others v Leeds Teaching Hospitals NHS Trust [2003] EWHC 1034). The judge held that in group litigation there is a clear risk that costs may become disproportionate and excessive and therefore the costs cap order was necessary to keep costs within bounds. However there seems no reason why the decision should not be followed by judges in other large-scale litigation.

Background

Since the inception of the CPR in April 1999, parties are required to provide the court and each other with estimates as to the likely costs to be incurred in conducting a matter. The estimates must be provided to the court at certain stages of the litigation and, until recently, have received little attention. In recent decisions, however, the courts have started to use their case management powers to control costs by relying on the parties' estimates. For example, the courts have begun taking into account a party's estimate filed during the course of litigation when assessing retrospectively the costs that will be allowed to be recovered by that party.

In the Nationwide Organ Group Litigation, Mr Justice Gage has gone further and for the first time used his case management powers to rely on the parties' estimates to impose a costs cap on the claimants' costs in relation to certain retrospective costs and also prospectively up until the end of trial. The parties have liberty to apply to vary the order, but only in the event of some future unforeseen and exceptional factor which affects costs.

Facts

This group litigation arises out of the practice by various hospitals to retain the organs of deceased children and adults. This practice was discovered in 1999, following which individual claims were made by claimants against the different hospitals involved through many different firms of solicitors. Because of the number of claims involved and common features of each of them, the claims were later grouped together and two Group Litigation Orders (GLOs) were made. The first GLO related to the Royal Liverpool Children's Hospital at Alder Hey, Liverpool and the second GLO, made in the current litigation, was in respect of all other hospitals and became known as the Nationwide Organ Group Litigation.

Earlier this year, Mr Justice Gage gave orders for directions for the conduct of the Nationwide Organ Group Litigation leading up to a trial...