Re Depuy International Ltd

• Jurisdiction: Ireland
• Judge: Mr. Justice Cross
• Judgment Date: 22 February 2017
• Neutral Citation: [2017] IEHC 101
• Docket Number: [2017 No. 32 MCA.]
• Court: High Court
• Date: 22 February 2017

[2017] IEHC 101

THE HIGH COURT

Cross J.

[2017 No. 32 MCA.]

IN RE DEPUY INTERNATIONAL LIMITED

IN RE APPLICATION ON BEHALF OF VARIOUS PLAINTIFFS

FOR A PRACTICE DIRECTION

Taxation – Quantum of damages – Personal injury – Defective hip implant – Practice direction – Payment of costs – Inherent jurisdiction – O.99 r.5 of the Rules of the Superior Courts

Facts: The applicants sought a practice direction from the Court pursuant to o.99 or under the inherent jurisdiction of the Court ordering the payment of the costs by the respondent for the damages sustained and the injuries suffered due to the defective hip implants manufactured by the respondent. The applicants contended that the respondent deliberately stalled the taxation system and delayed the payment of the costs and that the Court had to make an order requiring the respondent to pay a percentage of the bill of costs to the applicants subject to an undertaking by the applicants to reimburse the respondent in an event of any overpayment. The respondent attributed the reason for delay to the applicants' solicitors for submitting inflated and unaccounted bills.

Mr. Justice Cross refused to grant the reliefs sought by the applicants. The Court held that though o.99 r.5 was sufficient to allow the Courts to make an order for costs prior to taxation but that could happen only after the final determination of a case had been done by the Court, which was also subject to the undertaking by the applicants for paying back of any overpayment made in excess of the final determination of the taxing master. The Court noted that in the present case, there were various connected cases and the Court could not make any generic order without proper determination of costs of each and every case on a case-by-case basis. The Court also held that inherent jurisdiction could be applied only in exceptional cases wherein the parties had shown that there was involvement of a constitutional issue, which could only be determined by the Court, and in present case, there had been no specific denial of a constitutional right of the applicants to the effect of invoking the inherent jurisdiction of the Courts.

JUDGMENT of Mr. Justice Cross delivered on the 22nd day of February, 2017

1 Depuy International Limited (Depuy) are defendants in a number of High Court actions in which the plaintiff allege damages for injuries caused by the allegedly defective implanted hips.

2 An Alterative Dispute Resolution scheme was set up by Court Order and in respect of which a number of the plaintiffs qualified to initiate applications determined on a no fault basis but a significant number of other plaintiffs either did not come within the terms of the ADR or else chose, as was their right, to proceed in litigation in the High Court. In the ADR cases, Depuy have commendably agreed to advance the applicants €25,000 immediately as a down payment in respect of costs.

3 A number of these cases, which have proceeded to trial, have settled with a usual order of the proceedings being struck out with an order for costs to be taxed in default of agreement and to date only one case has proceeded to a final determination and in which a similar cost order was made.

4 A number of solicitors who between them represents a significant number of plaintiffs have brought motions before me to determine:-

(i) That a Practice Direction be brought in to address the plaintiff's costs by means of a payment of the plaintiff's costs on account, within such times, as a time that may be specified by the court pursuant to O. 99, r. 5 or the inherent jurisdiction of the court.

(ii) An order providing for a mandatory Arbitration of Costs.

5 The initial application was on behalf of Cantillon and Company Solicitors and similar applications were brought on behalf of Peter McDonald and Associates and on behalf of Cian O'Carroll Solicitors. Some of the applicants also sought to amend the ADR scheme in different ways. It was agreed that the application to amend the scheme would not proceed and would await further consideration.

6 It was conceded by counsel for the applicants being the plaintiffs in High Court proceedings that the court did not have jurisdiction to impose a mandatory arbitration procedure in respect of costs and accordingly, the matter fell to be determined in relation to the application for a payment on account.

7 Order 99, rule 5 of the Rules of the Superior Courts provides:-

‘(1) Subject to sub-rule (4A) of rule 1, costs may be dealt with by the Court at any stage of the proceedings or after the conclusion of the proceedings; and an order for the payment of costs may require the costs to be paid forthwith, notwithstanding that the proceedings have not been concluded.

(2) In awarding costs, the Court may direct—

(a) that a sum in gross be paid in lieu of taxed costs, or

(b) that a specified proportion of the taxed costs be paid, or

(c) that the taxed costs from or up to a specified stage of the proceedings be paid.

(3) At any stage of the proceedings, the Court may require the parties to produce to the Court and exchange with one another estimates of the costs respectively incurred by them, for such period as the Court may direct, and particularised in such manner as the Court may direct.’

8 The background to this application is that there is a significant and recognised and accepted problem with the taxation of costs. There is now only one Taxing Master who not alone has responsibility for work that was previously meant to be done by two but he is also obliged to set about the new scheme for taxation that will be put in place in the future. In addition, a decision of the Court of Appeal has meant that the individual taxation takes a far longer period of time that was previously the case. In effect, the taxation system has stalled. It may be arguable that there is a failure of the state to vindicate the rights of litigants for effective access to the courts under the Constitution and such as was held to be the case in respect of the United Kingdom in the case of Robins v. United Kingdom [1997] ECHR 22410/93. However, that issue is not for me to determine in this application.

9 It was submitted on behalf of the applicants that Depuy, the respondent had, in effect, deliberately stalled the taxation system and taken advantage of the delays in order to delay payment. It was submitted on behalf of the respondents that the applicants were, through their solicitors, submitting grossly inflated bills. It is not my function and I do not have sufficient evidence to adjudicate that dispute one way or the other. Suffice it to say that I accept that there is a significant problem with delay in taxation of costs.

10 I also accept that this delay has a particular hardship on these plaintiffs in that the litigation in respect of defective hips is almost always fully defended by the defendants, denying liability, denying causation and alleging, inter alia, that the ‘state of the art’ statutory defence applied to the hips at the time of their manufacture. I also accept that in order to counter these pleas, the plaintiffs are obliged to engage the services of a number of foreign experts and in particular that on the question of the ‘state of the art’ defence there is apparently only one expert of world renown who is based in Australia and who before he acts for a plaintiff requires the solicitor to undertake to pay a particular fee irrespective of whether that fee might tax.

11 I also accept that without any blame on any side, it may be necessary for the plaintiffs in order to secure agreement on a figure for costs so as to be paid within a reasonable time (to recover some costs) to compromise significantly below a figure that they could reasonably expect to attain on taxation. I also accept the evidence from Mr. Cantillon in his affidavit that plaintiffs cannot always be properly advised as to what portion, if any, of a settlement or decree will have to be taken from their award in order to pay outlay that their solicitor has been forced to contract to pay in order to get the case to a hearing.

12 From a practical point of view it is, of course, the case that if costs are sought to be reduced that the defendants could choose to make concessions, limited to particular cases should they wish, in relation to not disputing for the purposes of the particular case issues such as causation or the defective nature of the hips. This is a procedure that the defendants have adopted in a number of cases without prejudice to their general denial of liability. If such procedures were regularly adopted, the costs incurred by both parties could be greatly reduced. Such tactics are, of course, entirely a matter for the defendants but I make the observation given the history of the litigation in relation to Depuy hips up to date in that all of the cases set down for hearing (and all the cases require these dates to be specially fixed) have either been compromised prior to the date or settled after a number of days or in some cases weeks of hearing. There has only been one order of costs following a final determination of a case and in that case, the defendants had agreed, in effect, not to contest liability without prejudice to their general denials.

13 Be that as it may, I accept that in the Depuy cases there is a particular hardship on plaintiffs that does not arise to the same extent in other cases including in other medical negligence cases, in that the number of experts available are few and involve great expense which has to be defrayed. As a result, of course, the plaintiff's solicitors...