Best to sue in the right Court to avoid costs against you

Nov 19, 2018

The awarding of differential costs orders by the Court of Appeal in Moin -v- Sicika and O’Malley -v- McEvoy [2018] IECA 240 highlights the importance of proceeding in the court jurisdiction that best suits the monetary value of the case and remitting the case where necessary.

This Court of Appeal decision concerned two separate personal injuries cases brought in the High Court where the plaintiff had achieved an award well within the jurisdiction of the Circuit Court. Each award was based on full liability with no element of contributory negligence. In each case the trial judge awarded the plaintiff costs on the Circuit Court scale and a certificate for senior counsel but declined the defendant’s application for a differential costs order under s17(5) of the Courts Act, 1981 (as amended by substitution by s. 14 of the Courts Act, 1991). The defendants successfully appealed these costs decisions.

Section 17(5) provides that a trial judge who has awarded damages to a plaintiff which are within the jurisdiction of a lower court may order the plaintiff to pay the difference between the costs actually incurred by the defendant and those that would have been incurred had the proceedings been commenced and determined in the appropriate court (a differential costs order). The judge can measure these costs in certain cases or direct that they be taxed. Section 17(5)(b) provides for a set-off against the plaintiff’s costs.

The Court of Appeal observed that the clear legislative intent of Section 17 is to limit the amount of costs to be awarded in a case commenced in a higher court than was appropriate. The Court further observed that this is supported by the safeguard contained in Section 20 of the Courts of Justice Act, 1936 (as substituted by section 16 of the Courts and Civil Law (Miscellaneous Provisions) Act 2013) which provides that where a case is remitted to the Circuit Court from the High Court, the Circuit Court has jurisdiction to award damages in excess of the usual monetary limitation of the Circuit Court.

Peart J noted that the onus is on the plaintiff to ensure that the proceedings are conducted in the lowest court that has jurisdiction to make an award in an amount that it is reasonable to expect. He stated:

“Where the level of damages that can be expected are professionally considered to be within the level of the Circuit Court jurisdiction, whatever the plaintiff himself/herself may think should be awarded, serious consideration must be given to an application to remit to the lower court, or else face the risk of a differential costs order. That is the clear legislative intention of the Oireachtas.”

While Section 17 gives the trial judge discretion, the Court of Appeal held that it is incumbent upon a trial judge in circumstances where an award is significantly within the jurisdiction of a lower court to make a differential order unless there are good reasons for not doing so. The trial judge must have regard to the clear legislative purpose of Section 17 and all the relevant circumstances of the case. In awarding differential costs orders, the Court of Appeal observed that Moin -v- Sicika and O’Malley -v- McEvoy were not borderline cases and the defendants had given written notice months before trial of their view that the claims were within the Circuit Court jurisdiction and that they would seek a differential costs order under s. 17(5) of the Act of 1981.

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