11.12.2014Ted Baker Plc; No Ordinary Designer Label Ltd. v AXA Insurance UK Plc; Fuision Insurance Services Ltd.; Tokio Marine Europe Insurance Ltd.  EWHC 4178 (Comm)
Key areas: party’s conduct; both parties win some issues; High Court
This was a hearing to determine costs arising from a main action.
A preliminary ruling on liability had been given in the Claimants’ favour, but they ultimately failed in their claim. The costs incurred by all parties were “probably nearer to £7m” (excluding costs of an interim appeal), against a claim for £904,000.00.
The Defendants submitted that they should be entitled to all of their costs because the claims were dismissed, and that the Claimants failed to beat their offers that were made before the preliminary hearing. The Defendants also submitted that their costs should be awarded on the Indemnity Basis due to the Claimants’ conduct.
The Claimants submitted that they should be entitled to the costs of the preliminary issue, and that the Defendants’ subsequent costs should be reduced.
The Court that there “was no doubt” that the Claimants failed to beat the Defendants’ offers. However, it consider that it would be unjust for the Claimants to pay all the costs of the preliminary issue, and ordered them to pay 25% of those costs, on the Standard Basis.
In relation to the subsequent costs, the Court held that the Defendants lost some arguments, but won the “three main issues”. As a result, the Defendants were awarded all of their costs, on the Standard Basis.
05.12.2014Ontulmus; MTH Yatcilik; Kaiserwert GmbH v Collett; Ward & McKenzie (Yacht Consultants) Ltd.; Moore  EWHC 4117 (QB)
Key areas: both parties win some issues; party’s conduct; Indemnity Basis; Basis of assessment; High Court
This was a hearing to determine costs issues arising from a main action. One week before a CMC was due to be heard, each Claimant accepted the Third Defendant’s offer (11 months after being made) and discontinued against the other two Defendants.
The offers made to the First and Third Claimants were Part 36 offers, but that to the Second Claimant was on a “without prejudice save as to costs” basis. The discontinuances were made as the Defendants were “clearly impecunious”.
The Third Defendant issued an application for the Second Claimant pay all of his costs; and for the First and Third Defendants to pay his costs on the Indemnity Basis from the date his offers expired. He also sought a stay of the damages payment pending an offset of his costs, which the Court authorised.
In relation to the Second Claimant’s claim, the Third Defendant submitted that the award (£500.00) was only a “tiny fraction” of the amount sought (general damages plus €900,000 special damages); that it was always without merit because the Second Claimant did not trade; and that a claim for special damages was “false and dishonest” as it was based on an agreement that did not exist. The Court noted that there was no evidence in support of the Third Defendant’s position. However, based upon the damages (which it stated were “nominal”), the Court ordered that there be no costs up to the date the Third Defendant’s offer expired, with the Third Defendant to get his costs thereafter.
In relation to the First and Third Claimants’ claim, the Third Defendant conceded that he had to pay costs until his offers expired, but sought his costs from that point onwards. The Court agreed.
The parties then turned to the basis of assessment. The Third Defendant sought his costs from the Second Claimant on the Indemnity Basis, based on his previous submissions. The Court held that the Claimants’ conduct since the offers expired justified such an order, and that their acceptance of the offers was a “complete capitulation” on the special damages point.
The Third Defendant then sought an ordered that the Claimants be jointly and severally liable for the costs, given potential enforcement issues against the First Claimant. In support, he submitted that the First and Second Claimants were closely related, or alter egos; and they both had close connections with the Third Claimant; they only served one Costs Budget covering all of their costs; they “collaborated” on the claim for special damages; that only the First Claimant could actually give evidence; there was an attempted assignment of the claims to the Third Claimant; that the claims settled on the same day; and because the Claimants’ solicitors asked for interim payments to be off-set.
The Court held that there were “strong arguments” in favour of the Claimants being jointly and severally liable, and held that the costs incurred after the offers expired were “common costs”. However, it specifically excluded costs that solely related to any one particular Claimant.
05.12.2014British Gas Trading Ltd. v Oak Cash & Carry Ltd.  EWHC 4058 (QB)
Key areas: relief from sanction; High Court
This was an appeal against a ruling that the Defendant be granted relief from sanction.
At first-instance, the Defendant did not file its Listing Questionnaire in time, and was also in breach of an “Unless Order” that it so do. One day before the deadline of the Unless Order, the Defendant filed a Directions Questionnaire. The Court pointed this out, and the Listing Questionnaire was eventually filed, two days after the deadline, and 18 days after it was originally due. The Claimant applied for a Default Judgment, which was granted. The Defendant applied for relief from sanction, to set this aside, which was granted.
The Claimant appealed the order granting relief.
On appeal, the Court applied the 3-stage Denton test. It held that not complying with either the original Order or Unless Order could not be held to be “a serious or insignificant” breach; that even though the conducting fee earner was having personal problems, there was sufficient staff available to cover for him, and that the failure to file the correct form was due to the task being delegated to someone with insufficient knowledge; and the impact was that the original 2-day trial slot was lost. The Court also noted that the Claimant had not attempted to take advantage of the situation, and that the Defendant had effectively been given an extra two weeks to file the document.
As a result, the appeal was allowed and the relief from sanction was overturned.
04.12.2014Times Newspapers Ltd. v Flood  EWCA Civ 1574
Key areas: party’s conduct; Court of Appeal
This was an appeal against a costs order made at the end of a libel trial.
At first-instance the Defendant was ordered to pay all the costs of the proceedings, including those relating to a preliminary issue regarding privilege. The Defendant had submitted that it won the privilege argument on most of the publications, so it should be entitled to its costs. The Court ruled that the Claimant won overall, and it took into account the Defendant party’s conduct.
On appeal, the Defendant submitted that the Judge had not given the correct weighting to the various factors in the case, and that it won the privilege issue in the Supreme Court, after having a 4-day first-instance trial on that issue.
The Court of Appeal noted that the damages were far in excess of the amount offered by the Defendant, and that a serious allegation was made. It also noted that the Defendant refused to accept the outcome of the investigation into the Claimant made by his employers.
As a result, the appeal was dismissed.
02.12.2014Enercon GmbH; Wobben Properties GmbH v Wind World (India) Ltd.  EWHC 4049 (Comm)
Key areas: both parties win some issues; High Court
This was a hearing to determine costs that relating to applications for the Claimants’ anti-suit injunction which had been previously reserved.
The anti-suit injunction was later set-aside due to an undertaking regarding related proceedings in India. The Indian proceedings upheld an arbitration agreement, which the Defendant had previously disputed, but that the arbitration was to take place in India, with the English Courts only having “supervision”.
The Defendant submitted that it should have all of its costs because of the ruling that the claim should be dealt with in India. The Claimants submitted that they were entitled to issue due to the Court’s inherent jurisdiction, under s. 9 Arbitration Act 1996; or that costs should be left until after the arbitration proceedings were finalised; or that there should be no order as to costs.
The Court held that s. 9 did not apply because the proceedings were brought by the Claimants, not against them; and that this also went against arguments on “inherent jurisdiction”.
The Court also held that it should deal with the costs instead of adjourning them.
The Claimants submitted that they won the “main issue”; namely that there was an arbitration agreement, while the Defendant only won on the location.
The Court held that the Defendant actually won given the effect of the Indian court’s ruling, but that the costs should be reduced by 10% to reflect the fact that the Claimants won one issue.
02.12.2014Stacey (t/a the New Gailey Caravan/Motorhomes Centre) v Autosleeper Group Ltd.  EWCA Civ 1551
Key areas: ATE; mediation; Court of Appeal
This was an appeal in relation to an ATE premium.
In March 2010, the Claimant and a Fourth Party parties attended mediation, and subsequently settled the claim in the Fourth Party’s favour, with costs to be paid. The Fourth Party entered into an ATE policy after the mediation had taken place.
At first-instance it was held that the Claimant did not act reasonably, but the Fourth Party was “not an easy man to deal with” and dragged the case out for 6 months after the mediation. The Court noted that the costs would have been lower, but held that the Fourth Party would have had to instruct solicitors to finalise an agreement, and had to take out ATE to cover costs.
On appeal, the Claimant submitted that it was not reasonable to take out ATE insurance because the basic agreement was already in place. However, the Court held that the Judge made a proper assessment of the facts, and so it was reasonable to incur an ATE premium.
01.12.2014Hampshire Constabulary v Southampton City Council  EWCA Civ 1541
Key areas: third party contribution; Part 36 offer; Court of Appeal
This was an appeal in relation to a Part 36 offer.
The Appellant’s employee made a personal injury claim against them in relation to asbestos exposure. On 4th November 2010, the employee accepted a Part 36 offer of £76,351.20. On 15th December 2010, a Consent Order was agreed. The parties later agreed to settle costs for £140,000.00, plus £11,500.00 for costs of Detailed Assessment.
The Appellant subsequently issued a claim against the Respondent (who owned the property in question), for a third party contribution. However, this failed on limitation grounds, as it was held it ran from the date that the Part 36 offer was accepted, not the date of the Consent Order.
The Appellant appealed this ruling, submitting that s. 10 Limitation Act 1980 only applied when the total amount for which it was liable, including costs, was known, and so proceedings were issued within the 2-year limit. It also submitted that an existing High Court case on this point was wrongly decided.
The Respondent submitted that the High Court case was correctly decided, and that a Consent Order was not a “judgment” under s. 10(3).
The Court held that as the Appellant and employee settled the claim, there never was any “judgment”, and that the High Court case was correctly decided. It also held that s. 10(4) applied from when the damages were agreed, given its wording.
As a result, the appeal was rejected.
Thomas Legal Costs
12 Token House Yard
DX 138752 CHEAPSIDE
T: 020 7073 2601
F: 020 7073 2955