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The Civil Litigation ‘Pay as you go’ philosophy by Chiva Arthurs

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In a recent judgment, the High Court has reaffirmed the costs philosophy underlying the conduct of civil litigation in the Isle of Man under the Rules of the High Court of Justice of the Isle of Man, and reiterated that a fundamental principle of our rules of procedures is to encourage the determination and payment of costs on a ‘pay as you go’ basis.

In the case of Irvings v Carter and another (ORD 2013/19), a claim for breach of contract/negligence, the Court ordered that there be a split trial.

A split trial in effect involves certain issues being ‘split’ from the rest and being decided at an early stage. This allows costs to be saved in the event that the Claimant falls at the first hurdle.
In the Irvings v Carter and another matter, liability was to be decided at an early stage, and issues of causation and quantum of loss were only to be determined at a later date in the event the Defendants were found to be liable to the Claimants in the first instance. The Court found that the Defendants were indeed liable and a question arose as to whether the Claimants should be allowed to have their entitlement to costs decided at that point or whether such costs should be ‘reserved’, to be decided at the end of the proceedings.

The Court held that the Claimants were permitted to have their entitlement to costs decided at that point. The Court reminded itself that one of the reasons behind the order that there be a split trial was that the Claimants were facing difficulties funding the litigation, and splitting the issues to be determined could thus potentially save costs. The underlying tenor of the Manx Civil Procedure Rules requires the Court to deal with cases ‘justly’, which includes so far as is practicable, ‘ensuring that the parties are on an equal footing’. The Court accordingly took the view that the issue of costs should be determined before any further step was taken in the proceedings so that, if costs were to be ordered in favour of the Claimants, they could be legally represented and be in a position to fund the preparation of their case.
This case highlights the tactical use to which costs application in civil proceedings can be put. The timing of a costs order, and when these costs should be paid, can be the determining factor in whether a case is progressed further by a party of modest means. The judgment, however, is a stark reminder that, even in the face of litigation becoming more costly, the Court will ensure that, so far as it is able to, all parties have access to justice and are not prejudiced by their means in the face of opponents with deeper pockets.