Catch of the day

There was a time when lawyers could be reasonably certain what was going to happen about costs. Whether it was arbitration or litigation, costs would "follow the event". If you won, you would get your costs. If you lost, you would pay the other side's.

The only area of real complication was the payment into court. A defendant could pay what he thought the claim was worth into court. If the claimant accepted it within 21 days, the defendant would have to pay his costs up to that stage as well. If the claimant did not accept it, but at trial he won less than the payment into court, the defendant would pay the costs up to the date of the payment (plus 21 days), and the claimant would have to pay the defendant's costs thereafter. These would probably include the cost of a trial, so a payment in was a powerful tool.

But the new Civil Procedure Rules have much fuzzier edges than the old Rules of the Supreme Court. Many procedural issues have become very grey. Costs may follow the event, but increasingly a case is thought to involve several events. Costs of one aspect may be given to the claimant and costs of another to the defendant.

It is difficult enough to be confident about costs now even if there is no payment into court. If there is one (now called a Part 36 payment), the greyness can become a fog. Into that fog sailed a group of fishermen (Factortame and others) accompanied by the Secretary of State for Transport. In 1988 the government tried to enforce provisions of the Merchant Shipping Act 1988 to do with fishing quotas. The fishermen took the government to court and won – the quotas were contrary to European regulations. They were entitled to compensation.

Judge Toulmin was to decide how much. No doubt he opened the file with some surprise because he is a judge of the Technology and Construction Court.

The government made a Part 36 payment. The 21 days for consideration by the claimants came and went, and the payment was not accepted.

The trial took place in March and April 2000. After several days, the government asked leave to amend its case. It had found more statistics about catch sizes. There was argument about whether it should be allowed to do so, as the figures had been available for months, but the amendment was permitted.

Think carefully before altering your case. It might change the costs position dramatically

After reassessing the payment into court the claimants decided they wanted to accept it. The question was, what would happen to the costs, and in particular the costs of the 26 days of trial?

The government said it had effectively won – the payment into court had been accepted and should have been accepted months before. The fishermen should pay the costs of the trial.

The fishermen said they had reacted promptly to the amendment and accepted the payment as soon as was reasonable. The government had changed its case. If it had presented its case properly from the start, the payment would have been accepted at the time it was made. It should pay for the trial.

Judge Toulmin was not convinced the claimants would have accepted the payment earlier, but he agreed some allowance should be made for the late change of tack. He said the government should recover its costs from one week later than it would have done if the case had been properly presented.

The claimants appealed. The Court of Appeal heard the case in December 2001. Judge Toulmin's decision was upheld. There was no rule that said a late amendment of the defendant's case shunted the date for acceptance up to the date of the amendment. There was also no rule that said the original date had to apply. It was up to the judge to use his discretion.