Practice and procedure – Compensation claim – Costs – Claim under part 1 of Land Compensation Act 1973 for injurious affection to land – Rule 10(7) of Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010 – Whether claimants to be granted order protecting them from any future liability to compensating authority for costs in the proceedings – Whether compensating authority entitled to order joining claimants’ agent as party with a view to potential costs application against it – Applications of parties dismissed – Cap placed on claimants’ costs liability
The claimants claimed compensation from the compensating authority, under Part 1 of the Land Compensation Act 1973, for injurious affection to their property caused by noise and vibration from the adjacent West Coast main line as a result of the addition of extra rail tracks. They claimed £30,000 for reduction in the value of their property. A firm of chartered surveyors was instructed as agent to deal with that and 37 further claims brought by others in connection with the works; the claimants’ arrangements with the agent included an indemnity for professional fees which they would otherwise have to meet and a “no win, no fee” agreement.
In August 2013, the claimants applied for an order, under r 10(7) of the Tribunal Procedure (Upper Tribunal) (Lands Chamber) Rules 2010, as amended by the Tribunal Procedure (Amendment No. 3) Rules 2013, to protect them from any liability for the authority’s costs incurred connection with the claim after the date of such order. In October 2013, the authority applied for an order joining the claimants’ agent as a party with a view to making an application for costs against it in due course.
The claimants argued, in relation to their application, that the order they sought would accord with the policy of the amended rules that claimants of modest means should not be discouraged from pursuing respectable claims against deep-pocketed defendants because of the risk of a substantial liability in costs if the claim should fail; they submitted that, since the property was their home and they had no income and only modest savings, the tribunal should grant the order sought in the interests of access to justice. The authority contended that such an order would be inherently unfair since one side would be at no risk of costs, whereas the other would be at risk not only for its own costs but for those of the other side as well. It contended that the appropriate course, if the tribunal decided to give some costs protection to the claimants, would be to impose a costs cap on either side in the sum of £30,000.
Held: The applications were dismissed; the tribunal made an alternative order capping the claimants’ costs liability.
(1) Following the amendments made to the 2010 Rules by the 2013 Rules, the tribunal retained a very broad discretion in making orders for costs. Under section 29(2) of the Tribunals, Courts and Enforcement Act 2007, it had the power to determine by whom and “to what extent” the costs of proceedings before it were to be paid. The provisions of r 10 of the 2010 Rules should be applied with reasonable flexibility, in the light of the particular circumstances of the case in hand and with the aim of achieving the overriding objective of doing justice enshrined in r 2. Rule 10 distinguished between two types of cases. For cases within r 10(5) and (6), including claims for injurious affection to land, the tribunal had an express power to award costs. For other cases, r 10(4) nonetheless empowered the tribunal, either with the parties’ consent or where there was “a disparity of interest or resources” between them, to direct that one or more of them should be liable to another for costs incurred after the direction was made. That did not mean that a disparity in resources between the parties would be irrelevant in the context of proceedings within paras (5) and (6) and there might be cases within the scope of those provisions in which a disparity in resources was an important consideration in the tribunal’s decisions on costs. However, it was relevant that when r 10 had been amended, a deliberate decision had been made not to exclude claims for injurious affection from the regime of two-way costs shifting in para (6), notwithstanding that para (7) provided for the tribunal to disapply that regime in a particular case.
Further, while r 10(7) allowed for a decision, in proceedings falling within in r 10(6), that “no order for costs” might be made against a party or parties for costs subsequently incurred, that express power to take away the risk of any order for costs against a party did not exclude the making of an order limiting the future liability in costs of one or more of the parties to a particular level specified by the tribunal. Such an order could be made either with or without a reciprocal cap on the potential liability in costs of the other.
Applying those considerations to the instant case, the claimants should not have an order under r 10(7). Such an order would not reflect the normal position in a claim for compensation for injurious affection, in which the tribunal would normally, at the end of the proceedings, consider any application for costs made to it and determine that application in the light of its decision on the claim. An order under r10(7) giving to the claimants complete protection from any future order for costs being made against them, while leaving the compensating authority fully at risk, would transform the dynamics of the case and was not justified on the facts. The refusal of such an order would not mean that the claimants were denied justice since they were already safeguarded by their arrangement with the agent; the evidence did not demonstrate that, unless they were shielded from any future liability in costs to the authority, the claimants would be unable or unwilling to go on. The order could not be justified by the size and nature of the matters in dispute, which was a relevant consideration under r 10(8), since the claim was being dealt with by the standard procedure, the issues it raised were not unduly complex and the amount of compensation claimed was not unduly large.
(2) It was none the less appropriate to make a costs capping order, in the tribunal’s discretion, so as to limit the claimants’ potential liability. Taking into account the safeguards under the claimants’ arrangements with the agent, it was appropriate make an order limiting their future costs liability to £15,000. There were no grounds for placing a reciprocal cap on the authority’s costs liability.
(3) The tribunal’s power to join an additional party to the proceedings, under r 9 of the 2010 Rules, could be used to join a party whose only role in the proceedings would be to respond to an application for costs. None the less, it was not appropriate to join the claimants’ agent on the facts of the case. At the present stage, that course was not necessary to protect the authority, the agent or the claimants. The available evidence did not show the agent was manipulating the proceedings to advance its own interests, or that it had acted unreasonably in some other way, so as to expose itself or the claimants to the risk of a wasted costs order.
Daniel Saoul (instructed by Squire Saunders (UK) LLP) appeared for the claimants; Jonathan Klein (instructed by Eversheds LLP) appeared for the compensating authority.
Sally Dobson, barrister
Click to read transcript: Dickinson and another v Network Rail Infrastructure Ltd
