Heeney v Depuy International Ltd & anor

Factual and Procedural Background

The Plaintiff underwent a hip replacement operation in which an artificial hip manufactured by Company A was implanted. The Plaintiff alleged that the artificial hip was defective, necessitating its removal and replacement with a new artificial hip. Consequently, the Plaintiff initiated proceedings claiming personal injury, loss, and damage due to alleged negligence by the Defendants, and sought compensation under the Liability for Defective Products Act 1991.

The Defendants filed a full defence denying the defectiveness of the artificial hip and invoked the "state of the art defence" under section 6(e) of the 1991 Act. The matter was heard on 15th July 2015, at which point the parties agreed to enter settlement negotiations. The case settled with Company A agreeing to pay €250,000 as compensation and the Plaintiff's costs to be taxed in default of agreement.

In August 2016, Company A made a global payment of €500,000 on account of costs to the Plaintiff's solicitor, which was apportioned among various plaintiffs, resulting in €23,750 (plus VAT) allocated to this case. On 5th February 2016, the Plaintiff's solicitor submitted a short form Bill of Costs amounting to €663,421 inclusive of VAT. The Defendants' legal costs accountants responded on 20th February 2017 disputing the quantum of fees, accepting only approximately €143,299 inclusive of VAT.

The Plaintiff applied for a payment on account of costs pursuant to a practice direction issued by the President of the High Court on 28th March 2017, due to delays in taxation of costs and resulting cash flow difficulties.

Legal Issues Presented

1. Whether the court should order the Defendants to make a payment on account of costs to the Plaintiff pending taxation of the full Bill of Costs.
2. What amount would represent a reasonable and substantial payment on account without exposing the Defendants to the risk of significant overpayment.
3. The appropriateness of the level of fees claimed by the Plaintiff's legal advisers, including the engagement of multiple senior and junior counsel, in light of the settlement and complexity of the case.

Arguments of the Parties

Appellant's Arguments

• The fees claimed in the short form Bill of Costs were not excessive considering the novel and significant nature of the case as the first of its kind to be heard in Europe.
• The Plaintiff's legal team had to conduct extensive research to counter the "state of the art defence" raised by the Defendants, involving review of international medical literature.
• The volume of discovery material (approximately 20,000 documents) justified the engagement of a junior counsel dedicated to managing documentary evidence and briefing senior counsel.
• The retention of two senior counsel was reasonable given the complexity and novelty of the litigation; the Defendants themselves retained three senior counsel.
• Delays in taxation caused severe cash flow difficulties for the Plaintiff's solicitor, justifying a substantial payment on account under the relevant practice direction.
• The Plaintiff's solicitor provided the undertaking required by the practice direction to repay any overpayment following taxation.

Defendants' Arguments

• The compensation amount of €250,000 did not warrant the high brief fees claimed by senior counsel.
• There were numerous similar cases pending, so this case was not unique or exceptional to justify multiple senior and junior counsel.
• The Plaintiff could have submitted a detailed final Bill of Costs earlier to facilitate taxation and avoid delays.
• There was no undue delay in the taxation system once a final Bill of Costs was submitted, supported by evidence of timely taxation in a similar case.
• The Defendants offered to pay €125,000 as a payment on account.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The court recognized that the practice direction was intended to alleviate cash flow difficulties caused by delays in taxation of costs. However, the court had limited information before it, comprising only the short form Bill of Costs, the Defendants’ response, and brief justifications for the fees claimed. Due to the paucity of detailed evidence and argument on the reasonableness of the fees, the court declined to speculate on the appropriate level of fees payable to the Plaintiff’s legal advisers. It emphasized that such determinations are properly within the remit of the Taxing Master, who can hear detailed submissions and evidence.

The court expressed concern about the risk of serious overpayment to the Plaintiff’s solicitors if a large payment on account were ordered without sufficient basis. It also noted the Plaintiff’s solicitor’s undertaking to repay any overpayment but sought to avoid a situation where the Defendants would have to pursue repayment personally.

Accordingly, the court decided to order a global payment on account rather than itemizing or indicating what fees might ultimately be allowed. The court fixed the payment on account at €200,000, considering it a substantial yet reasonable sum that balances the interests of both parties.

The court also addressed procedural fairness by requiring that the payment be made within 21 days of the Defendants receiving a formal or final Bill of Costs from the Plaintiff’s solicitor, thereby incentivizing timely progression to taxation.

Holding and Implications

The court ORDERED that the Defendants make a payment on account of €200,000 in respect of costs to the Plaintiff within 21 days of receipt of a formal or final Bill of Costs from the Plaintiff’s solicitor.

This order represents a payment on account only and does not indicate the ultimate amount of costs recoverable by the Plaintiff. The decision balances the Plaintiff’s need for interim funding against the Defendants’ protection from overpayment. No new legal precedent was established, and the final determination of costs remains subject to taxation by the Taxing Master.