The High Court has clarified who bears a substantial court fee when a party rejects a legal costs tender and then fails to obtain more at adjudication, in a ruling arising from Yvonne Melia's €1 million medical negligence settlement with the HSE.
Melia's underlying proceedings settled at mediation in October 2022 for €1 million plus costs. When those costs could not be agreed, they went to formal adjudication.
In August 2023, the HSE tendered €445,204.72 inclusive of VAT in satisfaction of costs. Melia accepted the part relating to outlay and witness expenses but rejected the balance covering solicitors' and counsel fees.
After adjudication, Chief Legal Costs Adjudicator Behan allowed €443,637.62 for solicitors' and counsel fees, including €15,000 for post-proceedings costs associated with the adjudication. The result was just over €1,567 below the HSE's tender, meaning Melia had failed to beat it.
That triggered two legal questions which Chief Legal Costs Adjudicator Magee referred to the High Court.
First, Mr Justice Cian Ferriter held that the approximately 8% court fee imposed on adjudicated costs is itself part of the “costs of the adjudication”. The judge said the phrase naturally covers fees, charges, disbursements and other costs incurred because the adjudication proceeded. Under the tender rules, liability for such costs shifts after the date of a successful tender.
Second, however, the court held that a Legal Costs Adjudicator cannot subsequently alter a completed determination to remove Section D costs incurred after the tender. Section 158 of the Legal Services Regulation Act 2015 makes a determination final, subject only to the statutory reconsideration procedure.
The judge acknowledged that this can produce an apparent anomaly because adjudication-related costs may remain in the determined figure even though the claimant failed to beat the tender. He said any correction of that gap is for the Oireachtas rather than the court.
The judgment determines those legal costs questions only; it does not revisit the settled medical negligence claim.