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Melia v Health Service Executive (Approved)
Factual and Procedural Background
The Plaintiff issued medical negligence proceedings against the Defendant. The matter was specially fixed for a two-week trial. On 7 October 2022 the parties settled for €1,000,000 plus costs. By order of the High Court dated 13 October 2022 the Plaintiff was awarded costs (including reserved costs, discovery, mediation and a motion returnable for 13 October 2022) to be adjudicated if not agreed.
By notice of adjudication dated 14 November 2022 the Plaintiff referred the adjudication of those costs. The adjudication process involved adjournments, a struck-out and re-entered notice, and the Defendant obtaining leave to make a tender. On 18 August 2023 the Defendant tendered €445,204.72 (inclusive of VAT). The Plaintiff accepted the outlay/witness element but not the balance relating to solicitor and counsel fees.
The adjudicator (the Chief Legal Costs Adjudicator presiding at the adjudication) determined on 15 March 2024 that solicitor and counsel fees totalling €443,637.62 (inclusive of VAT) were allowed, including €15,000 in Section D (which included adjudication-related costs). The adjudicated total was €1,567.10 less than the Defendant's tender; the Plaintiff therefore failed to beat the tender.
The Defendant then brought a post-determination application (a "form 9") concerning the costs consequences of the failed tender. Issues for decision included whether the statutory/court "costs of the adjudication" include the 8% court fee charged under Part 6A of the Fees Order and whether an adjudicator may amend a prior Section D allowance after a determination when a tender that pre-dated some Section D costs was not disclosed before determination. The Legal Costs Adjudicator referred those questions of law to the High Court pursuant to s.159(1) of the Legal Services Regulation Act 2015.
Legal Issues Presented
- Whether the phrase "costs of the adjudication" in s.154(10) of the Legal Services Regulation Act 2015 and Order 99 r.60 RSC includes the applicable court fee on adjudication of a bill of costs (the c.8% court fee under Part 6A of the Fees Order).
- Whether, where a claiming party fails to beat a lodgment or tender, an Adjudicator has jurisdiction or power to adjust or amend a previously made allowance under Section D for adjudication costs when that allowance includes costs incurred after the date of the lodgment/tender and the tender could not have been brought to the Adjudicator's attention before determination (having regard to s.158(1)'s finality provision).
Arguments of the Parties
Defendant's Arguments
- "Costs of the adjudication" should be given its natural and ordinary meaning in context and therefore include the mandatory 8% court fee charged under Part 6A, since that fee is a cost necessarily incurred when adjudication proceeds to determination and arises only because the claiming party refused the tender.
- The lodgment/tender regime is intended to incentivise acceptance of reasonable offers; excluding the 8% fee would undermine that policy and reduce the lodging party's ability to transfer the adjudication risk.
- Where a claiming party fails to beat a lodgment/tender, the adjudicator should be empowered to reduce any Section D allowance that covers costs incurred after the lodgment/tender so the paying party does not wrongly pay adjudication costs incurred unnecessarily.
Plaintiff's Arguments
- "Costs of the adjudication" is a narrower concept, limited to solicitor's fees for preparing the bill and attending adjudication; the 8% court fee, while falling within the broad statutory definition of "legal costs", is not within the narrower phrase used in s.154(10).
- The Oireachtas deliberately used the narrower phrase and could have used wider language (e.g. "legal costs of the adjudication" or explicitly included court fees) if it intended to include such items.
- S.158(1) makes adjudicator determinations final (subject only to s.160); there is no basis to read into the Act a residual jurisdiction to revisit Section D allowances after a final determination simply because a lodgment/tender was not disclosed prior to determination.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Company A v Agency B [2022] IESC 43; [2024] 2 IR 222 | Principles of statutory interpretation: language, context and purpose (authoritative summary). | Cited as authority for the court's approach to construing statutory language in context when interpreting "costs of the adjudication". |
| Individuals A, B and C v Minister C [2023] 1 ILRM 335 | Further summary of statutory interpretation principles. | Referenced for the proposition that language, context and purpose are relevant and the plain meaning predominates subject to context. |
| Public Prosecutor v Judge McGrath [2021] 3 IR 785 | Limits on using subordinate rules to alter primary statutory meaning. | Used to support that court rules cannot be relied on to change the meaning of primary legislation. |
| Case D v Case E [1970] IR 61 | Principle that rules of court cannot operate so as to require legislative amendment. | Invoked to reject the argument that court rules could be treated as altering statutory powers or outcomes absent legislative authority. |
| Firm A v Chief Legal Costs Adjudicator [2025] IEHC 150 | Interpreting time limits and application of s.160(1) (14-day time limit for consideration under s.160). | The court held that this authority did not materially advance the specific s.158(1) finality question in the present case. |
| Case DC v Firm B (OCLA:2021:447) (determination delivered 16 Jan 2025) | Earlier adjudicator determination concluding the 8% court fee did not fall within "costs of the adjudication" in s.158(3). | The High Court considered that determination but concluded the statutory text and context support inclusion of the court fee contrary to that earlier decision. |
Court's Reasoning and Analysis
The court first addressed Question 1 by construing the phrase "costs of the adjudication" in s.154(10) in its statutory context. The court applied ordinary meaning and the statutory definition of "legal costs" in s.138, noting that "costs" encompasses "fees, charges, disbursements and other costs". The court reasoned that the 8% court fee in Part 6A of the Fees Order is a fee/charge incurred as a direct consequence of adjudication and therefore falls within the ordinary meaning of costs and within the definition of "legal costs" where incurred in connection with contentious business or a proceeding under an enactment.
The court rejected the plaintiff's argument that the phrase should be narrowly read to mean only solicitor's fees for preparing and attending adjudication, observing that the legislature used the broad term "costs" and that subsets such as "court fees" or "disbursements" are encompassed by that broader concept. The court held that neither the drafting of Order 99 nor earlier rule formulations justified narrowing the statutory meaning in s.154(10).
Turning to Question 2, the court analysed s.158(1), which provides that an adjudicator's determination is "final" and takes effect 20 days after it is furnished, "subject to section 160". The court found the language clear and unambiguous: finality is subject only to the express mechanism in s.160 (the 14-day consideration procedure). The court concluded there is no residual or implied jurisdiction for an adjudicator to revisit or amend a prior Section D allowance after a final determination simply because a lodgment/tender (which could not be disclosed before determination) pre-dated some Section D costs. The court rejected the defendant's submission that such a residual power should be implied to avoid unfair results, holding that any remedy for that perceived lacuna lies with the Oireachtas (legislative amendment) rather than judicial implication.
Holding and Implications
Question 1 - Holding: The court answered Yes: the phrase "costs of the adjudication" in Order 99 r.60 and s.154(10) of the Legal Services Regulation Act 2015 includes the applicable court fee on adjudication of a bill of costs (the c.8% court fee under Part 6A of the Fees Order).
Question 2 - Holding: The court answered No: an Adjudicator does not have jurisdiction or power to adjust or amend a prior allowance made under Section D for adjudication costs in the circumstances described (where the allowance includes costs incurred after the date of a lodgment/tender that could not be disclosed before determination), having regard to the finality of determinations under s.158(1) (subject only to s.160).
Implications: As a direct effect, an adjudicated award of costs will, when a claiming party fails to beat a lodgment/tender, encompass court fees such as the 8% fee and liability for adjudication costs shifts in accordance with Order 99 r.60 and s.154(10). The court identified that any perceived unfairness arising from finality leading to an allowance of costs incurred after a lodgment/tender is a matter for legislative amendment rather than judicial re-writing of s.158(1).
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