30.01.2012Wharton v Bancroft; Bancroft; Wharton; Fagan; Wharton  EWHC 91 (Ch)
Key areas: Probate; Indemnity Basis; Basis of assessment; party’s conduct; High Court
The Court held that there were no grounds for making the deceased’s estate liable for the costs up to 7th May 2010 (the date the Claimant’s Part 36 offer of £5,000.00 to the Third to Fifth Defendant expired), because the action was not caused by the Testator.
It also held that there were no grounds for making the Claimant liable for those costs either, because on the facts it was clear that dispute over the Will was caused by the refusal of the deceased’s daughters to accept it as being valid. It further held that there were no grounds for there being a reasonable belief that the Will was invalid, and so it was correct for the Third to Fifth Defendants to be liable for the costs.
The Court then determined the basis upon which those costs should be assessed. The Claimant submitted that they should be awarded on the Indemnity Basis because of the Third to Fifth Defendants’ conduct in the proceedings, and the Court agreed.
The Court then turned to the costs after the Claimant’s offer expired. Given that the Claimant beat her own offer at trial, she submitted that she should be entitled to these costs on the Indemnity Basis too.
The Defendants submitted that it would be unjust to make such an award because it was not a genuine attempt to settle. The Court rejected this too, stating that taking into account their likely costs the offer was worth £200,000.00. As a result, the Claimant was also awarded her costs from 7th May 2010 on the Indemnity Basis.
The next issue was the costs of the Executors, including the First Defendant who played little part in the proceedings in order to reduce costs. The Court noted that if no order or their costs was to be made, they would be taken from the Estate, which would penalise the Claimant. The Executors therefore submitted that their costs should be paid by the Defendants, again on the Indemnity Basis given the Defendants’ conduct.
The Third to Fifth Defendants submitted that this would be unjust because the Executors were separately represented at Trial.
The Court again held that the costs of the action should be paid for by the Third to Fifth Defendants on the Indemnity Basis.
As for the costs of the Executors obtaining an interim grant of probate, given that it was also required due to the Third to Fifth Defendants’ conduct, some of them should be considered to be costs thrown away.
In relation to interest, the Court held that the Claimant’s costs from 7th May 2010 should have 8.5% interest thereon with £455,000.00 to be paid on an interim basis, with a further £60,000.00 to be paid to the Executors on an interim basis.
27.01.2012PGF II SA v OMFS Co.; Bank of Scotland PLC  EWHC 83 (TCC)
Key areas: Part 36 offer; party’s conduct; High Court
This was an Application by the Claimant for the Defendant to pay their costs on the Standard Basis up to 2nd May 2011 and from 3rd May 2011 to 9th January 2012.
The trial in the main action was due to start on 11th January 2012 and the day before the Claimant accepted the Defendant’s Part 36 offer which was made on 11th April 2011.
The Defendant accepted that the Claimant was entitled to its costs up to 2nd May 2011, which was when their offer expired.
The Claimant submitted that it should be entitled to its costs from this date because on 10th January 2012 it discovered that the Defendant was going to deny liability, and so they should be entitled to their costs due to the Defendant’s conduct.
The Court held that, on the facts, it was within the Claimant’s ability to obtain the information which it sought from the Defendant from the documents which had already been disclosed. It also noted that there was no suggestion that the Claimant would have acted differently had the information been provided by the Defendant.
However, the Court also held that it was unreasonable for the Defendant to refuse the Claimant’s offer of mediation.
As a result, the Court held that the Claimant was entitled to its costs up to 2nd May 2011, but that there should be no order as to costs thereafter.
27.01.2012Concept Elite Inc. v Thames Enterprises Ltd.; Mehta; Mehta; Mehta; Crassula Ltd.; Chandaria; Chandaria; Auger Investments PLC  EWHC 94 (Ch)
Key areas: security for costs; High Court
This was an Application for security for costs brought by the First to Seventh Defendants against the Petitioner.
The Petitioner was a company based in Liberia and so the Court had jurisdiction to make an Order under CPR 25.13(2)(a).
The Court accepted that due to the lack of bankruptcy laws and legal system in Liberia generally, it would not be possible to enforce a judgement there.
There was no suggestion that the Application was an attempt to stifle a genuine claim; nor would it actually stifle such a claim. However, it noted that the Petitioner had not submitted any evidence regarding its own financial situation or that of its backers.
As a result, the Court stated that it would act on the basis that an Order for security would not stifle the claim.
It held that there was a reason to believe that the Petitioner would not be able to satisfy an Order for costs.
The Petitioner submitted that the Appellants’ delay in making the application should prevent the Order being made. The issue of security was raised in January 2011. However, given the relatively quick nature of the proceedings, the Court dismissed this argument.
Overall, the Court allowed the Application.
24.01.2012Okuonaghe v UK – 29930/10  ECHR 218
Key areas: liability for costs; hourly rates; European Court of Human Rights
This was a ruling to determine costs resulting from the out-of-court settlement of the Claimant’s claim.
The Claimant claimed £52,490.02/€61,390, which covered costs in these proceedings, as well as those in the High Court and Court of Appeal.
Solicitors costs were claimed at £38,200.00, at a rate of £250/hour, and included 101 hours on documents, disbursements of £2,990.00 (including £2,375 for preparing the Bill), and Counsel’s fees of £11,277.52 including VAT.
The UK submitted that it should not be liable for costs because it had not accepted that it had breached the Claimant’s rights, and instead should be rewarded for an early settlement of the case.
It also submitted that the sum claimed, including the solicitors rate, was unreasonable and disproportionate. It further submitted that the costs of the domestic proceedings should be excluded “because the applicant had pursued domestic proceedings that were hopeless on procedural grounds and he had failed to pursue a domestic remedy that would have been properly open to him”.
The Claimant submitted that by giving revoking its deportation order, the UK had implicitly admitted that it was wrong and so costs should be payable, which were also reasonable.
The Court noted that the UK had not given reasons as to why the proceedings were “hopeless” given that he relied on convention rights in the domestic proceedings.
The Court held that the costs, especially the solicitors work and time spent on documents, were excessive, and summarily assessed the costs at €10,000.00.
23.01.2012NAP Anglia Ltd. v Sun-Land Development Co. Ltd. (No. 2)  EWHC 51 (TCC)
Key areas: Basis of assessment; High Court
This was a hearing to determine costs arising from an application to enforce an adjudication by summary judgment.
The Application itself was successful other than the part which related to the fees of the Adjudicator, which was rejected.
The Claimant submitted that it should be entitled to its costs on the Indemnity Basis and to be assessed as claimed. The Defendant submitted that the Claimant should only be entitled to 60% (which was the same percentage of the amount sought that was allowed) of its costs on the Standard Basis.
In the main hearing, the Court criticised the Defendant’s conduct in relation to the contents of its witness statements and documents disclosed in support of it.
However, the Court held that because the Defendant managed to defeat a large part of the application, 85% of the Claimant’s costs should be awarded, on the Standard Basis. These were then summarily assessed at £16,803.60.
23.01.2012Hollister Inc.; Dansac A/S v Medik Ostomy Supplies Ltd.  EWPCC 12
Key areas: both parties win some issues; Basis of assessment; Patents Court
This was a hearing to determine quantum in light of the Claimants’ successful claim for a breach of copyright.
The Claimants were awarded £196,000 but had sought £500,000. The Claimants submitted that they were entitled to their costs. The Defendant submitted that it should be entitled to 30% of its costs, given the amount that the claim had been reduced by.
The Claimant also submitted that they had beaten the Defendant’s Part 36 offer of £70,000 plus interest, but had failed to beat their own Part 36 offer of £400,000. The Court held that the Claimants were entitled to their costs.
The Defendant submitted that the award for costs should reflect the fact that it had won on 12 issues, compared to the Claimants’ success on 6 issues. However, the Court held that the Claimants won the major issues, and so were entitled to their costs in full.
The Claimant then submitted that, based on the Defendant’s conduct, they should be entitled to Indemnity Costs. However, this too was rejected because the Court considered that there was nothing to take the case outside of the norm.
17.01.2012Thomas Brown Estates Ltd. v Hunters Partners Ltd.  EWHC 30 (QB)
Key areas: both parties win some issues; party’s conduct; High Court
This was a hearing to determine costs incurred under the Part 8 procedure.
The Claimant submitted that it should be entitled to all of its costs, claimed at £68,675.20 including VAT; the Defendant similarly submitted that it should be entitled to the whole of its costs instead, claimed at £97,020.56 including VAT.
The Defendant submitted that the Claimant had “failed to obtain any of the declarations sought”. The Court disagreed given that it had been able to stop the Defendant using its previous name, which was the aim of the proceedings.
The Defendant also submitted that in any event, the Claimant would “never have succeeded in obtaining” two of the three declarations it sought. As a result, the Defendant should be entitled to 50% of its costs, of those specific costs should be off-set against the Claimant’s.
The Court also disagreed with it being inevitable that the Claimant would fail, and if it was then the Defendant’s own costs would be disproportionate. It also stated that the Claimant was entitled to claim for the other two issues on the facts of the case. The Court also noted that the Defendant’s own conduct ensured that the inclusion of those issues was necessary.
Overall, the Court considered that the Claimant was entitled to the whole of its costs, which it summarily assessed at £65,000.00.
17.01.2012Villa Agencies v Kestrel Travel Ltd.  EWCA Civ 219
Key areas: apportionment of costs; both parties win some issues; Court of Appeal
This was an Appeal against an Order for costs made after a trial.
The Claimant obtained judgment of €9,344.38 in its claim, which was the amount claimed after a credit to the Defendant was taken into account; the Defendant obtained judgment in a counter-claim for €5,844.38, against a claim of €9,344.38.
The Order was that the “Claimant shall pay 2/3 of the Defendant’s costs of the Claim and Counter-claim” with an interim payment of £10,000.00.
The Defendant admitted liability in its defence, and proposed a set-off of its own counter-claim which would have extinguished the Claimant’s claim.
The Defendant had agreed to settle the claim on a “drop-hands” basis, which was rejected. The Claimant made a Part 36 offer of €5,000, which was also rejected. The Defendant subsequently made a further “drop-hands” offer, on the grounds that the Claimant also paid £15,000.00 towards its costs, which was also rejected.
At the trial, the Defendant submitted that it should be entitled to its costs because the case was simply about the set-off issue, not the main claim which had never been disputed. The Claimant submitted that it won overall, and so should be entitled to its costs in full, or that there should be no order as to costs. The Court held that the case had simply been about the counter-claim, and that the Claimant could have made a Part 36 offer to protect itself.
On appeal, the Claimant submitted that the claim was over whether the Defendant owed it money, and that the Claimant had been the net winner. The Defendant submitted that costs were a discretionary matter, and that the majority of the trial had been over the counter-claim.
The Court held that the Order for costs was “plainly wrong” because it was one overall claim, and the Claimant had to sue in order to get anything from the Defendant. It noted that the Claimant was the net winner by €3,500.00, and that it was wrong to say to say it was only about the counter-claim.
As a result, the Court held it was correct to make a different order for costs. The Claimant submitted that it should be entitled to 70% at first instance; the Defendant that it still should be entitled to ½ or 1/3 of its costs. The Court stated that the Defendant’s position was “completely devoid of all reality”.
In the circumstances, the Defendant was ordered to pay 25% of the Claimant’s costs at first instance, and had to bear its own costs.
05.01.2012Thewlis v Groupama Insurance Co. Ltd.  EWHC 3 (TCC)
Key areas: Part 36 offer; parties’ offers; acceptance of offers; rejection of offers; High Court
This was an application by the Defendant for a declaration that they accepted by the Claimant’s Part 36 offer.
Prior to the issue of proceedings, on 24th September 2008 the Claimant offered to settle the claim, which was rejected. Proceedings were issued on 25th May 2011, and the case was listed for trial in February 2012. On 17th October 2011, the Defendant “accepted” the offer.
The letter was headed “Offer to settle pursuant to Part 36 of the CPR” and stated that it “is made pursuant to Part 36 of the CPR and remains open for acceptance for a period of 21 days”.
The parties agreed that the offer had been rejected at common law and that if it was a valid Part 36 offer that it was accepted. The issue was whether the Claimant had actually made a Part 36 offer. They also agreed that the letter itself was drafted with the pre-6th April 2007 in mind.
The Claimant submitted that it contained clauses which went against Part 36; the Defendant that it contained references to Part 36 and so was a valid Part 36 offer.
The Claimant also submitted that it was stated as having the consequences of Part 36, and that it could only be accepted after 21 days “if we agree the liability for costs or the court gives permission”.
The Defendant submitted that when read as a whole, it was a Part 36 offer, given that Part 36 is referred to twice, once in bold.
The Court held that CPR 36.2 states “must” comply with certain provisions, which it did not; and that it was not clear that the Claimant intended the offer to comply with Part 36.
As a result, the Court held that the offer was not a valid Part 36 offer and also was not open for acceptance after 21 days.
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