Costs were awarded to the Respondent in this employees compensation claim, as the conduct of the Applicant in taking out the proceedings was found to be unreasonable - Chen Lai Fung v Pang Ming Wai Elixa Jane t/a Herbage TCM Medical Centre DCEC 1615/2012.
This decision again demonstrates the court’s intolerance of parties not acting in accordance with the underlying objectives set out in the Rules of the Court and the Civil Justice Reform. Litigation should be the last resort in resolving a dispute.
The Respondent, upon receipt of the legal aid certificate, sent a letter to the Applicant asking them for documents for the purpose of agreeing on a settlement figure. Around two weeks after the receipt of such letter, the Applicant issued a letter before action asking the Respondent to come up with an offer within the next seven days, failing which they would commence legal proceedings against the Respondent without further notice.
However, before the expiry of the deadline, the Applicant commenced the proceedings. On the same day of the filing of the Application, the Respondent sent out an offer letter, which the Applicant denied having received until a few days later. The claim was eventually settled with the Respondent admitting liability, but claiming costs against the Applicant.
The general rule of costs is that costs should follow the event, unless there are circumstances justifying the departure of such rule. The Court found that the conduct of the Applicant was not in line with the underlying objectives of the Rules of the Court, which include cost effectiveness, procedural economy and proportionality.
The Applicant commenced the proceedings before the expiry of their self-imposed deadline incurring costs unnecessarily and unreasonably which was not consistent with the underlying objectives. The Applicant should exhaust all possible negotiations to avoid incurring costs before commencing proceedings.