Personal Injury Claims – Costs Differential Orders

By Mary Purtill and Aisling Breen
2 August, 2018

Prior to the increase in power to award greater damages, the lower monetary levels of the District Court and Circuit Court meant that modest personal injury claims were being taken in the High Court. The consequence of this was that there was a high increase in legal costs for both parties and there was a certain level of an abuse of process and time in the High Court, which in turn caused huge delays and a backlog of cases. This was an issue which the Government wanted to address, so the monetary jurisdictions of the Civil Courts were reviewed and subsequently amended on 3 February 2014.

The monetary jurisdiction of the Courts had remained unchanged since the coming into force of the Courts Act, 1991. The changes were brought about to ensure that the thresholds were broadly in line with inflation. With respect to personal injury actions, the monetary limit of the District Court was increased to €15,000, the monetary limit of the Circuit Court was increased to €60,000 and the High Court monetary limit was unchanged and remains unlimited.

It is clear from recent decisions of the Court of Appeal that matters which are below the High Court monetary threshold are still being dealt with in the High Court, when they clearly should not be. However, a Court can penalise a party who receives an award that does not meet the Court’s jurisdictional threshold by awarding the typical costs of a lower Court, if it believes the application should have been sought in that Court. This is illustrated in the following personal injury claims, appealed to the Court of Appeal.

On 24 July 2018, the Court of Appeal decision from Peart J., with Hogan and Baker JJ concurring, delivered judgment in relation to Jibran Moin v Veronica Sicika and John O’ Malley v David McEvoy. In both the above cases, the High Court Judge was asked to make differential cost orders and in each case the High Court refused to do so and both cases were appealed.

Both appeals concerned personal injury claims in which the High Court awarded damages which were well below the High Court threshold. In both cases, following the award of damages, Counsel for the Defendants applied for differential costs orders pursuant to Section 17(5) of the Courts Act 1981 (as amended by S.14 of the Courts Act 1991).

Under such provisions, there are two options available to a trial judge who has awarded damages to a plaintiff, which are within the jurisdiction of a Court lower than that in which the case has been commenced and determined. In the first instance the trial judge can simply measure a sum which they consider to be the difference between the costs actually incurred and those that would have been incurred, had the proceedings been commenced and determined in the appropriate Court, and direct that the plaintiff pay that sum of money to the defendant. The second option does not involve the trial judge making any measurement of the difference and instead gives the task to the Taxing Master who is tasked with taxing costs.

In the case of Moin v Sicika, the Plaintiff sustained soft tissue damage arising from a RTA in which the Plaintiff was a passenger of one of the vehicles involved. The total damages awarded, which included special damages, was €41,305, was obviously within the Circuit Court jurisdiction. Counsel for the defendant requested that the trial judge exercise her discretion and make a differential order under s.17 (5) of the Act of 1981. When making this request, Counsel for the defendant made the Court aware that 11 months prior to the trial date, correspondence was issued to the plaintiff’s solicitor, by the defendant’s solicitor advising that this matter was being dealt with in the incorrect jurisdiction. The trial judge in making her decision inquired as to whether or not she was required to make an order under s.17 (5) in such instances. The trial judge was correctly assured that the section provided a discretion to make such an Order, where the award for damages were within the jurisdiction of the lower Court. In such circumstances the trial judge awarded costs on the Circuit Court scale and gave a certificate for Senior Counsel.

In the second set of proceedings, John O’ Malley v David McEvoy, the total damages awarded including special damages were in the sum of €34,808. In this case the defendant’s solicitor had also written to the plaintiff’s solicitor some 15 months prior to the trial date indicating that this case had commenced in the wrong jurisdiction. The defendant’s solicitor also set out a warning in the same letter, stating that in the event that damages were awarded below the level of the Circuit Court jurisdiction, that they would be seeking a differential costs order under s.17 (5) of the Act of 1981. Counsel for the defendant sought such an order after damages were awarded. The trial judge was again assured that he had discretion to exercise his power in relation to s.17 (5) of the Act of 1981.

In both cases, the trial judges expressed their views with regards to the cases being commenced in the High Court. In the latter case, the trial judge acknowledged the difficulty posed to the plaintiff’s solicitor, given the fact that, at the outset of the trial, the case seemed appropriate for the High Court. In the former case, the trial judge went as far as to say that it would have been negligent on the Plaintiffs solicitor’s part if they did commence proceedings in the Circuit Court, when the injuries in question were in relation to a back injury.

Clearly both cases failed by a substantial margin to exceed an award of damages within the €60,000 jurisdiction of that Court.

In both cases, the Court of Appeal held that the trial judges’ reasons for not making the differential order were insufficient. Notice was given to the fact that both the defendants’ warning letters were written a substantial period of time before the case was heard. Another significant factor in both cases was that the award made in the High Court was well below the threshold.

The Court of Appeal went on to award the discretionary order in both cases.

It is worth noting that the Court of Appeal stated that there was no question of the cases being borderline, which would suggest that if they were borderline then a Court would have discretion not to make such an order.

A differential cost order is a discretionary one, open to the Court and in the past the Courts have been slow to make such Orders. However the most recent decisions of the Court of Appeal now makes it binding on a trial judge to make the Order unless there is a valid reason not to.

For more information on the content of this Insight please contact:
Mary Purtill, Partner, mary.purtill@rdj.ie, +353 1 6054215