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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Burgess v British Steel Plc & Anor [2000] EWCA Civ 3019 (19 January 2000) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2000/3019.html Cite as: [2000] CP Rep 48, [2000] EWCA Civ 3019, [2000] PIQR Q240

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IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION
(LORD JUSTICE TOULSON)

		Royal Courts of Justice Strand London WC2
		19th January 2000

1. LORD JUSTICE SWINTON THOMAS: This is an appeal, with the leave of the single lord justice from an order as to costs made by Toulson J on 30th November 1998. The judge ordered that the defendants pay the claimant's costs of the action up to 26th August 1998, and that there should be no order as to costs between the parties thereafter. The importance of 26th August 1998 is that it was on that date that the relevant payment into court was made by the defendants.
2. The judge was trying a personal injury claim bought by Mr Brian Burgess against British Steel and Mr Wayne Anthony May, arising out of a road traffic accident which occurred on 7th January 1992. The second defendant, who was an employee of the first defendant, drove a lorry out of a garage forecourt and collided with the claimant's car. Mr Burgess was seriously injured. There was no dispute as to liability. The judge tried the issue as to quantum of damage only. The trial took place in November 1998 and the judge gave his judgment on 30th November. He awarded the claimant the sum of £161,592.22.
3. On 26th August £220,000 had been paid into court. In those circumstances Mr Browne, QC, for the defendant, submits that the judge was wrong in principle in not awarding the defendants their costs as from that date. This being an appeal in relation to costs it is of the first importance that one reminds oneself that the issue involved is one in relation to which the judge heard the case and heard all the evidence and was exercising a well recognised broad discretion. This Court, as the authority very plainly show, must be slow in interfering with an exercise of discretion of that nature.
4. It is necessary to refer, I hope in not too much detail, to the relevant facts and issues that arose in this case. They are set out with admirable clarity, if I may say so, in Toulson J's primary judgment. The claimant sustained serious physical injures in the accident. He had fractures of the left ankle and foot, a fracture of the left hand, a fracture of the right wrist and the nose, and a probable fracture of the left rib. He suffered much bruising in many parts of his body. He was left with permanent disabilities and his ability to enjoy life and take part in his hobbies and sport were considerably restricted. The judge assessed the general damages for pain and suffering and loss of amenity at £31,500.
5. In addition to the physical injuries the claimant suffered psychological damage. The primary issues that arose for the judge's decision related to the extent of the psychological injury, the causation of the claimant's various symptoms, the financial consequences of the accident, the extent to which Mr Burgess' ability to earn had been adversely affected by the accident and the extent to which his financial problems were attributable to matters which were unrelated to the accident and the injuries sustained by Mr Burgess in the accident.
6. Mr Burgess was born on 1st April 1954 and was aged 37 as at the date of the accident; 44 as at the date of trial. His case was that, in addition to the physical injuries sustained by him in the accident, he suffered from post-traumatic stress disorder and a depressive illness.
7. Both sides commissioned medical reports including psychiatric reports. A Dr Jawad, a consultant psychiatrist instructed by the defendants, prepared a lengthy report dated 11th April 1998 in which he concluded, amongst other matters, that the claimant was a malingerer. In the result, Dr Jawad was not called to give evidence at the trial. The claimant's advisors and the judge were informed that the defendants did not propose to call Dr Jawad just before the conclusion of the cross-examination of the claimant.
8. The claimant's case, supported by medical evidence, was that he suffered a post-traumatic stress disorder and a depressive illness. However, it transpired at the trial that the claimant's personal and working life were complex; and the judge concluded that his psychiatric and financial problems were properly attributable to a number of different causes of which the accident was but one. He married in 1974 and had three children by the marriage; that was ended in divorce in 1988. In that same year he commenced work with the Abbey Life Assurance Company as a self-employed salesman. His earnings were quite modest. In October 1991 he started work as an independent financial advisor, starting that work about three months or so before the relevant accident. Shortly before starting work as an independent financial advisor, he had commenced a relationship with a lady called Anita.
9. In June 1992 he set up his own independent business. That business continued between June 1992 and February 1995. That period spans the period after this accident. In 1994 he started to suffer from psychological problems and was treated by his general practitioner, Dr Carman, and a clinical psychologist, Mr Mackay, both of whom prepared medical reports which were before the judge. Neither of those practitioners was called to give evidence. Their reports dealt with various problems in Mr Burgess' life, including difficulties at work and difficulties in his relationship with Anita.
10. In March 1995 Dr Carman referred Mr Burgess to a Dr Britten, a consultant psychiatrist, who gave evidence at the hearing. In 1995 the relationship with Anita came to an end and towards the end of 1995 Mr Burgess sold his business. In 1996 he commenced a relationship with another lady.
11. In relation to the claimant as a witness the judge said this:

"In summary, I believe that he was fundamentally honest but at times confused and prone to give answers which seemed to assist his case without thinking carefully about their accuracy."

12. Accordingly, the judge came to the conclusion that it was necessary to treat the claimant's evidence about past events with considerable circumspection. Without making any criticism of Dr Britten, the judge also had reservations about some of the conclusions reached by him, largely because he did not see Mr Burgess until May 1995, by which time he had stopped work in his business.
13. On page 20 of his judgment the judge set out these conclusions:

"Considering these various factors in conjunction with the late onset of Mr Burgess' symptoms of depression and the evidence of Mr Cloutman, I do not believe that the accident was the dominant cause of Mr Burgess' depression; but I do accept that it contributed to his feelings of despondency about himself and lowered his ability to cope successfully with the other pressures which he faced. In that sense it was a contributory factor in the development of his illness. I also think that as time went by he increasingly focused in his own mind on the accident as the source of his troubles, and that itself has tended to prolong and intensify his symptoms.

As to the future, I accept Dr Britten's opinion that Mr Burgess needed the trial to be concluded in order to rebuild his life. In the future I would have thought that he could well go back to work as a tied agent or any other job involving his undoubted salesmanship skills, and that he has the ability to become again a creative and energetic person. He gets on well with other people. But nobody would recommend him to try to run his own business, least of all as an IFA."

14. The judge then turned to consider the financial claim put forward for loss of earnings and the loss of the claimant's business. On page 22 of the judgment the judge said:

"The challenges which Mr Burgess faced in trying to establish his own business were different from those which he had ever previously experienced and put him under considerable stress, complicated by his relationship with Anita. I have not heard from her. But if she was wanting marriage and a family and Mr Burgess (as he told me) did not intend marriage, it is difficult to see that the relationship had a long term future. If not, he was going to have to refashion his business plans at a time of a breakdown in his personal relations. My impression of Mr Burgess is that although he had been a branch manager in the retail clothing business his strength lay in selling, at which he was very good, rather than business administration."

15. And then a little further on:

"Taking into account both the general uncertainties of the small IFA market about which I heard evidence from experts and Mr Burgess' individual personality and situation (apart from the consequences of the accident itself), I have substantial doubts whether he would have made a long term success of the business in any event; but I accept that the accident diminished his prospects of doing so by making life physically more difficult for him and by contributing to the onset of his depression. There is in my view a somewhat greater likelihood that but for those factors he would have kept the business going for a rather longer time, disposed of it in a more orderly way and returned to some other employment, eg that of a tied agent, as Mr Goode offered."

16. The judge then awarded damages as set out on page 27 of the judgment: Pain and suffering and loss of amenities - £31,500; loss of earnings to trial - £35,071.45;
17. future loss of earnings - £56,566.80; capital loss - £2,589.80; loss of pension - £4,000; Other special damages - £9,485; other future loss - £9,000, making a total of £148.213.05. When interest was added the total sum was £161,592.22.
18. The judge having given his judgment then heard submissions in relation to costs. It was submitted on behalf of the claimant that, in the light of the allegation contained in Dr Jawad's report and repeated in the defendants' skeleton argument that the claimant was a malingerer (in respect of which, as I have said, no evidence was called, with the result that that allegation was not proved against him) he should have the totality of his costs. The defendants submitted that they should have their costs as from the date of the payment in, the claimant having recovered substantially less than that payment.
19. The judge adopted a half-way house between those submissions and gave his ruling in which he set out his reasons. In the circumstances I think it is necessary that I should read the bulk of the judge's ruling. He said:

"It is well known that a plaintiff who fails to beat the payment in should pay the defendant's costs from the date of payment in unless there is some good reason to depart from the ordinary rule. Whether there is a sufficient justification to depart from that rule is a matter which lies in the discretion of the judge. Like all judicial discretions, it has to be exercised on the facts of the individual case, but recognising that the general rule should not be departed from save for good reason.

In this case the plaintiff submits that there is good reason in that the way in which the case was defended up to the trial went far beyond a denial that the plaintiff suffered the symptoms of which he complained as a result of the accident. This was a case which was all about the plaintiff's claimed psychiatric ill effects from the accident and the financial consequences of his having to give up his business when his mental health broke down.

The defendants served one medical report from a Dr Jawad, a consultant psychiatrist. His report was based on an interview with the plaintiff and tests which he carried out during interview, in the final paragraph of that report dated 11th April 1998 he stated: 'In conclusion Mr Burgess is a malingerer with respect to the psychiatric symptoms.' In the event, Dr Jawad was not called as a witness. It was indicated, when cross-examination of the plaintiff began, that no final decision had been taken whether to call Dr Jawad or not. The final decision was made after the conclusion of the plaintiff's cross-examination.

The plaintiff says essentially two things about that. First, he says that the allegation made against him was very grave. It challenged in the squarest of terms his whole integrity and amounted to the accusation that he was bringing what he well knew to be a bogus claim, and that this allegation was maintained - or at least not dropped - until after the conclusion of his evidence albeit that no evidence was, in the event, brought to support it. He submits that it would not be just that one party who makes such a grave attack on the character of another and fails on it should be treated in the costs in the same way as if the attack had never been made. There is no general rule in this regard. The Court has to look at what is just on the facts of the case. Circumstances in which allegations of dishonesty are made and fail or are not pursued can vary infinitely.

Secondly, the plaintiff submits that a consequence of the way in which he believed the case was being made a against him was to lead him to view it in what turned out to be a false light. He and his advisers saw the case in stark terms: was he a conman or was he not? His own response to the accusation was one of deep hurt. He and his advisers did not consider, in the way that they might otherwise have done, the risk that the Court would accept his integrity but conclude that his symptoms were substantially the result of other factors. In the event, I did conclude that he was an essentially honest man, but there were elements of compensation neurosis, and I found that the accident was a contributory but far from the dominant cause of those symptoms.

What is the just cause for me to take? I think that it is just that my order in the matter of costs should reflect the fact that this charge was made in a very serious and direct way; that it was sustained up to trial; and that in the event it was rejected by me, no evidence having been called to support it. I do not feel that it would be just that a plaintiff who has come to trial, of course in order to secure a damages award but also to fight off the allegation made, should end up having to bear the entire costs of the action in circumstances where, although he has failed to beat the payment in, he has left court without any stigma of malingering of a kind which had been levelled against him.

Secondly, I do not think that the plaintiff and his advisers ought to have failed to realise their need to prove that the symptoms were due to the accident, but I do have a measure of sympathy with him and his advisers when it is said that the whole way in which the case was viewed prior to trial in the light of the psychiatric evidence disclosed by the defendants was different from the way in which the trial in fact went. It often happens that trials go differently from the way in which they have been when anticipated; but where that is caused in part by one party launching a particular form of attack of a grave kind, which is then not carried through or fails, that is something which the Court can and should justly bear in mind when deciding where the costs ought to lie.

I think that the plaintiff asks too much when he asks that he should have the costs of the action. That fails to reflect the fact that he has failed to beat the payment in which, on sober analysis, ought to be have been accepted. But looking at the matter in quite broad terms, and asking myself what I think is fair, I think that fairness and justice would be done on the special facts of this case if I make no order as to costs from the date of the payment in."

20. As I have already said, Mr Browne, on behalf of the defendants, submits that the judge plainly fell into error in making that order and that he should have followed the usual course of ordering a claimant who has failed to beat the payment in, to pay the cost as from that date, and that there were no circumstances in this particular case which justified the judge in departing from the general rule. The primary question that arises is whether there were facts in this case, which justified the judge in making an unusual order.
21. Mr Browne relies on the general principles set out in the judgment of Lord Somervell LJ in Findlay v Railway Executive [1950] 2 All ER 969 at 971 when he said:

"The first point to be decided here is whether a defendant who has paid money into court which has not been taken out and exceeds the sum awarded to the plaintiff is a successful litigant or a successful party within those two statements of the law. I hold that he is, and that the principles there laid down apply. The main purpose of the rules for payment into court is the hope that further litigation will be avoided, the plaintiff being encouraged to take out the sum paid in, if it be a reasonable sum, whereas, if he goes on and gets a smaller sum, he will be penalised wholly or to some extent in costs. Once, therefore, the money has been paid in, the lis between the parties simply is: is that sum sufficient to cover the damage which has been suffered. Prima facie, therefore, the defendants in the present case are entitled to be paid their costs as from the date of payment in. But, of course, as in other cases, there may be circumstances connected with the case which entitled the judge to make some order other than that of giving the successful litigant his costs, and counsel for the plaintiff submitted that there were such circumstances in this case."

22. That passage has been reflected in the Rules of the Supreme Court. It has been submitted on behalf of the defendants that the prima facie rule must apply; and it is submitted by Mr Kemp on behalf of the claimant that there were the special circumstances to which Somervell LJ made reference, which justified the judge in departing from the general rule.
23. Mr Browne also referred us to a recent case, Ford v GKR Construction and Others the judgment being given on 22nd October 1999 in Cardiff and reported in the Times on 5th November 1999. The appeal heard by the Master of the Rolls, Pill LJ and Judge LJ was an appeal in relation to costs. It was a case in which a payment into court had been made. The claimant failed to beat the payment in but the judge ordered that the defendant should nonetheless pay the claimant's costs, the Court holding that in the particular circumstances of that case the judge was entitled to make the order that he did. That case is relied upon by Mr Kemp. However, Mr Browne submits, rightly in my judgment, that there are clear distinctions to be drawn between Ford and the instant case. In Ford the hearing was adjourned, and in the course of the adjournment the defendants instructed an inquiry agent who took a video recording of the claimant; that video recording entirely changing the nature of the case. When the video recording was disclosed to the claimant and her advisors she then tried to settle the action but was unsuccessful in doing so. In those circumstances, this Court held that the judge was entitled to exercise his discretion in the way in which he did, but as I have indicated, the present case is quite different from that case.
24. Mr Browne then submits, however, that the only special circumstance which arose in this case is that a consultant psychiatrist was instructed by the defendants who came to the conclusion that the claimant was malingering. Mr Browne points to the fact that that doctor was not called to give evidence. He submits that the mere serving of a medical report containing that allegation cannot be a special circumstance which would justify the judge in departing from the usual rule that if a claimant fails to beat a payment into court then he or she must pay the costs as from the date of the payment in.
25. Mr Browne then points to the fact that Dr Jawad's report was prepared on 11th April 1998 and served on the claimant and his advisors shortly thereafter, with the result that he and his advisors had full knowledge of the allegations that were contained in the report when the decision was made not to accept the money which had been paid into court within the period of 21 days allowed by the rules for such acceptance. Mr Browne then finally submitted, again with some justification, that a payment into court of this magnitude indicated that the defendants appreciated that the allegation of malingering was one which was unlikely to succeed. Mr Kemp, in an admirably succinct submission, said this was a case where the judge heard the evidence and was exercising a discretion, and he exercised that discretion on proper and appropriate grounds in the course of the judgment of which I have read.
26. The appropriate principles to be followed in considering an award of costs after a payment into court are set out in a judgment given by this Court on 13th October 1999 in Jones v Jones. On page 19 of the judgment Chadwick LJ said in relation to the provisions of the Rules:

"The scheme of those provisions is clear. Money may be paid in at any time. In particular, it may be paid in before the disclosure of the witness statements and expert reports on which the defendant will rely; and so, before the plaintiff knows the full extent of the defendant's case. The plaintiff has 21 days in which to decide whether to take the payment out of court. If the plaintiff decides to do that, it can be done without leave. The plaintiff makes that decision on the basis of his assessment, under advice and on the materials then available of the risk of failing to obtain an award of damages greater than the amount of the payment in court. If the plaintiff decides not to accept the payment in within the 21 day period, then he cannot accept it without leave. But it is always open to him to reassess the risk in the light of anything which subsequently emerges in the course of the proceedings, including anything which emerges in the course of the trial. In particular, the plaintiff can reassess the risk in the light of witness statements and experts' reports which are disclosed by the defendant after the date of the payment in."

27. As I have already said, the claimant in this case was in possession of Dr Jawad's report prior to the payment in. He was fully aware as of the date of the payment in of all the risks that were involved in the litigation. The issue that arose in this case for the judge's decision was the amount of money that should be awarded to the claimant in the action. There were, of course, as is always the case in a complex personal injury case, a number of sub-issues, including the suggestion of malingering; but all those matters in this case were subsidiary to the primary issue. In a personal injury case, in particular one involving alleged psychological damage, a number of factual issues are likely to arise on some of which the claimant may succeed and on some of which the defendants may succeed. However, in the great majority of cases, those issues form a part of the evidential pattern leading to an overall conclusion as to the amount of money that the claimant recovers. It is, in my judgment, unusual to deprive a defendant who has paid a sum of money into court well in excess of the claim of any part of his costs because he was unsuccessful on a particular evidential issue, although it may be open to the Court to deprive that party of the costs relating to the issue itself. In the same way it would be unusual to deprive a claimant of his costs in a personal injury claim if he had beaten the payment into court but had not been successful on certain evidential issues.
28. Bearing in mind the way in which the judge arrived at his conclusion on the costs issue, it is perhaps worthy of note that the question of malingering is not mentioned in the judge's primary judgment at all; that is not surprising when it was not pursued by the defendants at the conclusion of the claimant's cross-examination.
29. The judge based his order (at least in part) on the concept that the claimant had to come to court to fight off the allegation that he was a malingerer. There is no evidence at all, and indeed it is unlikely to be the fact that the claimant came to court in order to defeat that allegation, save in the sense that it was necessary to do so in order to recover the damages claimed by him. There is no evidence that he came to court to maintain his good character as opposed to recovering the sum of damages which he considered he was entitled to recover. He did not, for example - and not surprisingly - through his solicitors, write to the defendants saying that he would accept the money on offer if the allegation of malingering was withdrawn. I have little doubt that if that offer had been proposed it would have been accepted.
30. In a personal injury action of this kind where there is a substantial claim for loss of earnings based substantially on psychological damage, it is, in my judgment, plain beyond peradventure that the issues such as the stress imposed by personal relationships, the claimant's ability to run a business on his own, the problems that arose in the financial services sector at the material time, would all be at the centre of the debate, as indeed they were at the centre of the evidence and at the centre of the judge's findings, which resulted in the claimant's failure to beat the payment into court. As the judge said the claimant and his advisors ought to have appreciated that they must prove that his symptoms and his financial losses were caused by the accident. In my view, Mr Browne is right in submitting, on the basis of the judge's primary judgment, that the real issue in this case was one of causation. It was necessary for the claimant to prove that his losses resulted from the accident, and he failed to do so to the extent of recovering more than the payment into court.
31. I understand the judge's feelings of sympathy towards this claimant, but, in my view, the fact that, in a medical report the defendants made an allegation that the claimant was malingering, is not of itself sufficient to permit the judge to depart from the normal rule as to costs following a payment into court. In the well known case of In Re Elgindata Ltd 2 [1992] 1 WLR at 1207, this Court held that the general rule that costs should follow the event unless there were circumstances suggesting some other order should be made did not cease to apply merely because a successful party had raised issues or made allegations which he had failed to establish at the hearing of the action; a successful party to an action would not have acted improperly or unreasonably in raising issues, and if he had not done that he ought not to be ordered to pay any part of the unsuccessful party's costs. It does not seem to me, in the circumstances that arose in this case, that it could be said that the defendants had acted improperly or unreasonably in raising the issues that they did. The facts of Elgindata were very different of course to the facts of the present case; but the principle is the same.
32. In this case, by reason of the payment in the defendants had become the successful party and "the event" was the failure of the claimant to recover more than the payment in. I have no doubt that the judge did have, as I have said, considerable sympathy with this seriously injured claimant when he appreciated that his order meant that the claimant had failed to beat the payment in, with the result that he had to pay all the costs since the date of the payment in, and there would be little, if anything, left for him. I share that sympathy. I also, if I may say so, sympathise with the judge's approach to the costs issue. However, I am wholly persuaded that in this case the judge did fall into error and has been shown to have been wrong. The judge is very experienced in this field, and I stress again as I did at the outset of this judgment, that he both heard the evidence and was exercising a discretion. However, I am persuaded that there was no proper basis in this particular case upon which to depart from the general rule that if a claimant fails to beat the payment into court then the defendants should be entitled to their costs as from that date. Accordingly I would allow the appeal.
33. LORD JUSTICE CHADWICK: I agree.
34. There is no dispute as to the principles which govern the award of costs in a case in which there has been a payment into court of an amount which exceeds the amount of the damages and interest to which the claimant is held to be entitled after trial. Put shortly, from the date of the payment in, or more accurately, from a date which will usually be 21 days after the date of the payment in, the claimant pursues his action on the basis that, if he does not beat the payment in, he will be treated, for the purposes of the Court's discretion as to costs, as if he were the loser. The consequence is that, applying the general principle that costs follow the event, it will be appropriate to make an order that the claimant pays the costs after that date, unless it appears to the Court that in the circumstances of the particular case some other order should be made as to the whole or any part of those costs.
35. The judge took the view that there were circumstances which enabled him to make some order other than an order which reflected the fact that the claimant had pursued a claim after a date when he could have taken out of court more than the amount to which he was eventually held to be entitled. The judge took that view on the basis that the claimant was facing a serious allegation that he was a malingerer, which he was entitled to meet and defend at a trial. In a passage to which Swinton Thomas LJ has already referred, the judge said this:

"I think that it is just that my order in the matter of costs should reflect the fact that this charge was made in a very serious and direct way; that it was sustained up to the trial; and that in the event it was rejected by me, no evidence having been called to support it. I do not feel that it would be just that a plaintiff who has come to trial, of course in order to secure a damages award but also to fight off the allegation made, should end up having to bear the entire costs of the action in circumstances where, although he has failed to beat the payment in, he left court without any stigma of malingering of a kind which had been levelled against him."

36. The judge must have intended to refer in that passage to the liability to pay the costs of the action after the payment in, rather than "the entire costs of the action." There was never any suggestion that the claimant should not have the costs of the action up to the time of her payment in.
37. The allegation of malingering was an allegation with which this claimant was faced when he made the decision, following the payment in on 25th August 1998 of the final instalment by the defendants, to pursue the action. It is impossible to conclude that this decision to pursue her action, insofar as it was made on financial grounds alone, would have been different if the claimant had known in August 1998, or thereafter, that the allegation of malingering would not be pursued. The chances of recovering were reduced, not increased, by the existence of an allegation of malingering. So an actual decision to pursue the action in circumstances in which the allegation was being made is consistent only with a putative decision to pursue the action if the allegation was not being made - at least if the two decisions are treated as made on financial grounds. The claimant cannot be heard to say that the hurdles which he had to surmount were increased by anything which happened after the payment in. In fact, the hurdles diminished, in that the allegation of malingering was not pursued at the trial.
38. The judge's approach leads, I think, to the conclusion that there was nothing that the defendant could do by way of payment in to prevent this trial proceeding. No matter how large the amount that was paid in, the defendants could not protect themselves against the risk of having to bear its own costs of the trial. It could do so only by withdrawing Dr Jawad's report or any reliance upon it.
39. The claimant's difficulty, as it seems to me, is that he never suggested that Dr Jawad's report was the reason why he was pursuing his claim. The defendants were entitled to take the view that the claim was being pursued for the reason that personal injury claims are usually pursued; namely, in order to obtain an award of damages. Had the defendants been told that the claimant was content with the amount on offer, but was pursuing the claim only in order to obtain a retraction of Dr Jawad's report, the defendants would have been in a position to take appropriate steps. But that was never made clear to the defendants; and in those circumstances it seems to me that there was no reason why the claimant should not bear the ordinary risk, namely, the risk of having to pay the defendants' costs if he pursued a damages claim after a payment into court of a substantial amount.
40. I am conscious, as this Court must always be conscious, of the importance of respecting the exercise of the trial judge's discretion in relation to costs; particularly in circumstances where the trial judge has had the advantage of a much clearer understanding than an appellate court can have of the factors which affected the course of the litigation which he tried. But in my view, the reason which the judge gave for departing from the ordinary rule as to the award of costs in these cases is one which cannot be supported.
41. In those circumstances it seems to me that this Court is required to set aside the judge's order; and is entitled to exercise its own discretion.
42. For those reasons I, too, would allow this appeal.
43. LORD JUSTICE CLARKE: I agree that this appeal should be allowed although I have perhaps found the case more difficult than my Lords. The relevant principles have most recently been set out in the judgment of my Lord, Chadwick LJ, in Jones v Jones (unreported) on 13th October 1999 and in the other cases to which my Lord, Swinton Thomas LJ has referred. The judge expressed the principles in this way:

"It is well known that a plaintiff who fails to beat the payment in should pay the defendant's costs from the date of payment in unless there is some good reason to depart from the ordinary rule. Whether there is a sufficient justification to depart from that rule is a matter which lies in the discretion of the judge. Like all judicial discretions, it has to be exercised on the facts of the individual case, but recognising that the general rule should not be departed from save for good reason."

44. To my mind that statement of principle is correct. The question for the judge was whether there was good reason to depart from the general rule on the facts of the instant case. That depends on all the circumstances of the case as they appeared to the judge when he was asked to exercise his discretion. Those circumstances can, in my judgment, include events after the date of payment of the payment in. For example, they can include the way in which the defendants conducted the case, including the trial.
45. In the instance case, the judge, who of course had the great advantage of having presided over the trial, took account, amongst other things, of the following facts. The defendants served the opinion of Dr Jawad which included a statement of his view that the respondent was a malingerer. That opinion was sent to the judge before the trial, presumably on the basis that it was evidence upon which the defendants intended to rely. That is plain from the fact that they relied upon that report in their skeleton argument which was also put before the judge. Some of the contents of the report were put to the plaintiff in cross-examination. The word "malingerer" was not used, but some of the answers which he had given to Dr Jawad were put to him. He said that he had become upset. This exchange then occurred:

"Q. You say you became upset. In what

way did you become upset?

A. Because I couldn't answer the questions. (Witness upset).

Q. So you are saying, are you, that youranswers were influenced by the fact that you were very upset rather than being true attempts to answer the questions?

A. No, I really tried to answer the questions but they just became so complicated. I just could not answerthem and by the time you finished with me I couldn't -- I just -- I was so ashamed that I could not answer the questions and when I walked out ofthere I just felt like nothing.

Q. You were sure that that is the explanation rather than an attempt toplay up the symptoms as best you could, Mr Jawad?

A. No, no. "

46. After the cross-examination the judge was informed that the defendants would not rely upon Dr Jawad's report.
47. In reaching his conclusion on costs, the judge, in passages to which my Lords have variously referred, said this:

"What is the just cause for me to take? I think that it is just that my order in the matter of costs should reflect the fact that this charge was made in a very serious and direct way; that is was sustained up to trial; and that in the event it was rejected by me, no evidences having been called to support it. I do not feel that it would be just that a plaintiff who has come to trial, of course in order to secure a damages award but also to fight off the allegation made, should end up having to bear the entire costs of the action in circumstances where, although he has failed to beat the payment in, he has left court without any stigma of malingering of a kind which had been levelled against him.

Secondly, I do not think that the plaintiff and his advisers ought to have failed to realise their need to prove that the symptoms were due to the accident, but I do have a measure of sympathy with him and his advisers when it is said that the whole way in which the case was viewed prior to trial in the light of the psychiatric evidence disclosed by the defendants was different from the way in which the trial in fact went. It often happens that trials go differently from the way in which they have been anticipated; but where that is caused in part by one party launching a particular form of attack of a grave kind, which is then not carried through or fails, that is something which the Court can and should justly bear in mind when deciding where the costs ought to lie.

I think that the plaintiff asks too much when he asks that he should have the costs of the action. That fails to reflect the fact that he has failed to beat the payment in which, on sober analysis, ought to have been accepted. But looking at the matter in quite broad terms, and asking myself what I think is fair, I think that fairness and justice would be done on the special facts of this case if I make no order as to the costs from the date of the payment in."

48. The question is whether the exercise of the judge's discretion in that way was plainly wrong in the light of the relevant principles. The judge would, in my opinion, have been entitled to deprive the defendants of the costs of instructing Dr Jawad and in particular of the costs relevant to the allegation that the respondent was a malingerer. He could, in my judgment, have done so consistently with the principles in In Re Elgindata Ltd (No.2) [1992] 1 WLR 1207 per Nourse LJ at 1214.
49. The question is whether it was outside the permissible exercise of the judge's discretion to deprive the defendants of all their costs after the payment in, or, more accurately, after 21 days from the payment in. I have reached the conclusion that it was. There is no evidence that one of the causes of the respondent proceeding with its case after the payment in was the allegation of malingering. If the judge reached a different conclusion in any of the passages quoted above I regret that I am unable to agree with him.
50. The respondent's object in pressing the matter to trial was, in my judgment, plainly to try to obtain more than the £220,000 paid into court. The defendants were thus bound to incur substantial costs as a result of the respondent's decision to reject the payment in and to fight for more. Quite apart from the evidence of Dr Jawad and the issue of malingering, that decision inevitably led to the defendants incurring very substantial costs. In these circumstances, I do not see how the allegation of malingering, if I may so describe it, could possibly justify depriving the defendants of all their costs. In these circumstances, the exercise by the judge of his discretion by depriving the defendants of all their costs was outside the permissible range of the exercise of that discretion. For this reason I agree that the appeal should be allowed. As I see it, the question which will now arise is how this Court should exercise its discretion, given the conclusions reached by the judge.
(Appeal allowed with costs as from 21 days after payment in. Defendants will not recover any costs incurred in relation to Dr Jawad or in relation to the malingering issue).