“There are consequences for failing to deal with litigation reasonably” – Challenge the evidence or you could face a wasted costs order.

Mina Heung, barrister of Whitestone Chambers secures costs award against Bott & Co on grounds of acting unreasonably in bringing claims that were bound to fail.

In the cases of Ebdon, Duffy and Liddle v KLM Royal Dutch Airlines[1], District Judge Trigg made a wasted costs order against Bott & Co Solicitors, a Flight Delay Compensation company.    The judgement provides an object lesson on the dangers of pursuing a futile case and for failing to challenge your opponent’s evidence.

This article looks at the question of burden of proof in a flight delay compensation claim under the EU Regulation EC 261/2004 and how Bott & Co was met with defeat and ordered to pay for the Defendant’s wasted costs for failing to deal with litigation reasonably.

The Case

EC 261/2004 requires airlines to compensate passengers when flight delays or cancellations result in passengers reaching their final destination more than three hours later than originally scheduled, unless the airline can establish on the defence in Regulation 5(3) which states that: “An operating air carrier shall not be obliged to pay compensation in accordance with Article 7, if it can prove that the cancellation is caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken.”

The Claimants brought actions against KLM for a cancelled flight, proceedings were issued on 11 May 2018.  KLM’s defence argued that the flight in question was cancelled at the request of Air Traffic Authorities.  On 23 August 2018, the claims were stayed by Liverpool County Court pending the appeal of Blanche v EasyJet[2].  On 6 February 2019, the Court of Appeal handed down its decision and ruled that disruption(s) caused by an Air Traffic Management Decision is deemed to be an extraordinary circumstance and that the Courts are not required to look at the reason behind the decision, meaning all airlines have to prove is the decision was made by the Air Traffic Control.  This is of course not the end of the matter,  as in order to rely on air-traffic management decisions under Regulation 5(3), airlines would still have to show that all reasonable measures had been taken to avoid the delay caused by the impact of the decision.

Following the decision in Blanche, KLM submitted direct evidence from Amsterdam Air Traffic Control Authority detailing the reason for the flight cancellation.  KLM further provided evidence to show that after considering a number of solutions, the claimants were put on the first available flight to their final destination, thereby discharging their duty on the “reasonable measures” requirement under the Regulation.

Notwithstanding the outcome of Blanche , the Claimants & Bott & Co still decided to argue the unarguable and prosecute the claims to trial by ignoring KLM’s evidence and counsel’s skeleton argument served ahead of the trial.  Bott & Co then elected to be absent at the trial on 7 October 2020 and pursued a written argument that runs contrary to the Court of Appeal’s decision in Blanche and contrary to the evidence provided by KLM, which was somewhat surprising as Bott & Co was the firm that represented Mrs. Blanche in her appeal to the Court of Appeal and lost.

The claims were eventually dismissed on the grounds of Bott & Co’s “audacious” legal arguments and the fact that KLM’s evidence regarding reasonable measures was not challenged at all – the claimants’ written submissions simply said that “the defendant has failed to support its contentions that reasonable measures were taken”.

An application for a wasted costs order pursuant to CPR 46.8 and section 51(6) of the Senior Courts Act 1981 against Bott & Co was immediately made by counsel at the conclusion of the trial.  At the costs hearing, Bott & Co admitted they were negligent in submitting and applying the wrong law but maintained that they were not wrong in pushing the claims to trial because despite the extraordinary circumstance arguments, KLM would still have to demonstrate they had taken all reasonable measures to minimise the delays caused to the passengers.  Whilst KLM accepted that they had to satisfy the “2-limb test” in order to successfully establish a defence under the Regulation, in the absence of any rebuttal evidence from the claimants and the fact that Bott & Co chose not to instruct representatives to attend the hearings and challenge KLM’s written and live evidence, the conclusion was inevitable given that the Court would only have KLM’s unchallenged evidence to rely on when making a finding.

In awarding wasted costs to the defendant’s, District Judge Trigg stated:

“With regard to the wasted costs order being sought against the legal representative, I have to consider whether the legal representative acted improperly, unreasonably, or negligently.  I take the view that they have acted unreasonably.

The answer to the question, “Has the conduct caused a party to incur unnecessary costs?” is “yes” and it is the costs of the hearing.  In answer to the question, “Is it just to order the legal representative to pay?”, the answer is “yes” to that as well.  There are consequences for failing to deal with litigation reasonably. “

There are a number of important lessons here: (i) know the law (ii) if you put a party to strict proof, do not just leave it here, unchallenged evidence will be accepted by the court (iii) know when to stop!  Even though you do not bear the burden of proof, examine the evidence before deciding to go to trial to avoid pursuing a hopeless case and facing a costs order.

© Mina Heung

Whitestone Chambers

[1] In the County Court at Staines, 4th December 2020

[2] Daniel Blanche v EasyJet Airline Company Limited [2019] EWCA Civ 69

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