Lodgment of €85,000, an Award of €95,000 and the Costs Risk
Ms Ciara O'Neill claims damages for a back injury sustained in a road traffic accident on 3 February 2022. Her solicitor issues proceedings and pleads special damages of €18,000 and general damages. On 1 March 2024 the defendant's insurer lodges €85,000 into court under Order 22 RSC. The plaintiff does not accept the lodgment. At trial on 20 January 2025 the judge assesses damages at €95,000, plus costs. The defendant argues that because the award is only €10,000 above the lodgment, the plaintiff should not recover all her costs after the date of lodgment. The plaintiff's solicitor had advised that the claim was worth €120,000. The plaintiff has legal costs of €42,000 to date; the defendant's costs are €35,000. The plaintiff asks whether she should have accepted the lodgment and what costs order the court should make.
1. Explain the costs consequences under Order 22 because the plaintiff beat the lodgment.
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The lodgment is a payment into court which the plaintiff may accept or reject. If the plaintiff rejects it and later recovers a sum greater than the lodgment, the defendant does not obtain the protection of the lodgment. The plaintiff is the successful party and is prima facie entitled to her costs of the proceedings, ordinarily measured on the party-and-party scale and usually to include the trial. The fact that the award exceeds the lodgment by only €10,000 does not by itself split the costs or deprive the plaintiff of post-lodgment costs; the test is whether she beat the lodgment, not by how much. The court retains a discretion under Order 99 and the Courts Act 1981, but it will not normally penalise a plaintiff who has recovered more than the sum paid in. The defendant's argument that the plaintiff should have accepted €85,000 is relevant to the risks the plaintiff took, but it is not a costs rule. The plaintiff should therefore expect an order that the defendant pay her costs, although the precise scale and any special costs order remain within the trial judge's discretion.
2. If the award had been €80,000, what costs order would follow? Calculate the likely financial outcome for the plaintiff, including her own costs.
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If the award had been €80,000, the plaintiff would have failed to beat the €85,000 lodgment. Under Order 22 the ordinary consequence is that the plaintiff recovers her costs up to the date of lodgment, but the defendant recovers its costs from the date of lodgment. The plaintiff also bears her own solicitor-and-client costs incurred after the lodgment date, because those are not recoverable from the defendant. The award of €80,000 is therefore not the plaintiff's net recovery. On the figures given, if roughly half of the plaintiff's €42,000 costs were incurred after 1 March 2024, she would bear about €21,000 of her own costs; if a similar proportion of the defendant's €35,000 costs were incurred after that date, she could be liable for about €17,500 of the defendant's costs. Her net recovery could fall to around €41,500 before any other deductions. That illustrates the costs risk of rejecting a lodgment. The plaintiff should have compared the €85,000 offer with a realistic net recovery after costs, not simply with the €120,000 valuation, and should have been advised in writing of the consequences of failure to beat the lodgment.