Background
Yvonne Melia brought medical negligence proceedings against the Health Service Executive. The parties settled the claim for €1 million shortly before trial in October 2022, with the plaintiff’s costs to be adjudicated in default of agreement. The defendant made a tender of €445,204.72 in August 2023 to satisfy the plaintiff’s costs claim, but the plaintiff rejected the professional fee portion and proceeded to adjudication.
The Legal Costs Adjudicator determined that €443,637.62 in costs were properly allowed—some €1,567 less than the defendant’s tender amount. Consequently, under the statutory scheme for cost adjudications, the plaintiff had failed to beat the tender, raising questions about the allocation of adjudication costs and court fees between the parties. The parties sought the High Court’s opinion on two questions of law via case stated.
The Court’s Holding
Justice Cian Ferriter considered whether the phrase “costs of the adjudication” in section 154(10) of the Legal Services Regulation Act 2015 and Order 99, rule 60 of the Rules of the Superior Courts includes the 8% court fee levied on bills of costs under the Supreme Court, Court of Appeal and High Court (Fees) Order 2014. The defendant argued the fee must be included as a necessary cost arising from the adjudication process; the plaintiff contended it was excluded because the statute used the narrower term “costs of the adjudication” rather than “legal costs of the adjudication.”
Applying established principles of statutory interpretation, the court examined the natural and ordinary meaning of the phrase in its statutory context, the scheme of Part 10 of the 2015 Act, and the policy objectives of the lodgment and tender regime. The court rejected the plaintiff’s argument that “costs of the adjudication” is a narrower subset of “legal costs,” finding no principled basis in the statutory language to exclude mandatory court fees that are incurred only because the adjudication proceeded to determination.
Key Takeaways
- Court fees imposed by statute as part of the adjudication process fall within “costs of the adjudication” for purposes of allocating costs when a claiming party fails to beat a tender.
- The lodgment and tender regime is designed to incentivize acceptance of reasonable settlement offers; including court fees in the cost allocation reinforces that incentive by placing the full cost of an unsuccessful adjudication on the party who rejected the tender.
- The statutory phrase “costs of the adjudication” must be interpreted according to its natural and ordinary meaning in context, not artificially narrowed to exclude categories of legitimate costs arising from the adjudication process.
- This interpretation applies consistently whether the costs arise as legal practitioner fees or as mandatory court fees levied by statute under the Fees Order.
Why It Matters
This decision clarifies the financial consequences for claiming parties who reject reasonable tenders in legal costs adjudication proceedings. When a party declines a tender and proceeds to adjudication only to recover less than was offered, they not only lose the costs of the adjudication from the tender date forward but also bear the 8% court fee imposed on the adjudication itself. This significantly strengthens the incentive for parties to carefully evaluate settlement offers, as the cost of rejecting a reasonable tender includes both professional fees and statutory court fees.
For legal practitioners and their clients, the decision means that cost adjudications carry a higher financial risk than might initially appear. Even a narrow failure to beat a tender—such as recovering €1,567 less than the tendered amount—triggers liability for all adjudication costs and court fees accrued after the tender date, creating a powerful mechanism to discourage prolonged disputes over costs that are ultimately close to the parties’ positions.