31.01.2013Dau Chi Chong v Funafloat Ltd. (t/a College Cruisers); British Waterways Board  EWCA Civ 212
Key areas: apportionment of costs; third party contribution; Court of Appeal
This was an appeal over apportionment and contribution to costs arising from a successful defence to a main action.
The Claimant initially only issued proceedings against the First Defendant, who then issued a Part 20 claim against the Second Defendant on potential liability. The Claimant subsequently issued proceedings against the Second Defendant, but this was a year after being informed that the First Defendant had an indemnity of up to £2 million.
In light of the failed claim, the Defendants claimed costs, but these exceeded the indemnity of the Claimant’s insurance. As a result, the Claimant wrote to the Court stating that they “would not have brought the Second Defendant into the proceedings had it not been for the First Defendant’s part 20 claim”.
At first instance, the First Defendant stated that this ignored the fact that proceedings were issued to the indemnity, and that, in any event, the Second Defendant owed a duty separate to the First Defendant. The Second Defendant submitted that the First Defendant should pay the main action costs due to bringing them into the claim. At first instance, the First Defendant was ordered to pay the Second Defendant’s costs in the main claim, but with an indemnity from the Claimant.
On appeal, the First Defendant repeated their submissions, and that there was no reason for them to bear both Defendants’ costs. The Second Defendant submitted that they were the only successful party, given that they defeated both the main claim and Part 20 claim.
On appeal, the Court held that the initial Judge was wrong, and the usual costs rules should apply. It held that the Claimant was entirely responsible for the main claim, and chose to issue against the Second Defendant. This then caused the Part 20 claim to “drop off the radar”.
It held that both Defendants acted reasonably in the main action, and the First Defendant should only be liable for the Part 20 costs, not the main action costs. it also suggested that the costs should be apportioned from the Claimant’s insurance, so that no one Defendant was entirely left out.
28.01.2013Henry v News Group Newspapers Ltd.  EWCA Civ 19
Key areas: costs budgets; Court of Appeal
This was an appeal against an Order by a Costs Judge concerning Costs Budgets in a libel claim. The Budget had been prepared under the Defamation Pilot Practice Direction 51D.
The Claimant had exceeded her budget by £268,832 and the extra costs had been disallowed, as had a success fee.
At the first CMC the parties had to give budgets, both of which were approved. Neither party sought to get theirs increased.
At first instance the Judge held that the costs were reasonable and proportionate, but that there was no good reason to exceed the budget, and that she had not complied with para. 5.5 of the PD to alert the Defendant.
However, on appeal it was held that this was simply a factor to take into account, and that the Defendant and Court was also at fault.
In the circumstances, the Court held that there were good reasons to exceed the budget and so the appeal was allowed.
The Court also noted that the proposed Rules in Multi-Track cases differed from those in the Defamation Pilot, including for the Court to take greater control of the budgeting process and costs.
28.01.2013T v T  EWHC B3 (Fam)
Key areas: family proceedings; High Court
This was an application by the husband relating to a financial agreement resulting from a divorce.
The parties had divorced in 1991, and the terms had been agreed around that time.
The husband had since benefited financially due to his business, while the wife had not done so.
Their child started university in 2009, and the husband paid for her to do so. In October 2011, the wife’s solicitors sought financial disclosure because the agreement had never been subject to court proceedings.
In April 2011, the wife issued a formal application for this, with the husband subsequently issuing an application that it should not do so.
At a hearing in July 2012, the parties argued over why the agreement had not been put in court: the husband said that it was because both had copies of it and had acted upon its terms, and he assumed that his solicitors had submitted the documentation; the wife did not give any explanation, but felt hard done by.
At this hearing, the husband submitted that the agreement was the most important factor, and the wife had waited over 20 years before making a claim against him. The wife submitted that it was simply an interim agreement; and that she was forced into agreeing to its terms, as well as there being non-disclosure of evidence.
Before the agreement was signed, the husband disclosed the existence of his pension and life assurance. The wife’s solicitors stated that this must been included in the terms of the agreement, before it was finalised, which was done. The wife says that she was not aware of its existence, but the Court rejected this given the firm’s specialisation, and her lack of complaints against the firm.
The Court then held that while there were minor differences in valuations, they did not support a claim of non-disclosure; that there was no evidence that the husband forced her into signing the agreement; and that she was properly and fully advised as to the contents of the agreement. It also accepted the husband’s explanation as to why the agreement was not put in court.
It also noted that the husband’s financial status had occurred since they divorced, and he had been remarried for almost 20 years.
Given the extensive delay in issuing an application, the Court stated that this “secures the agreement rather than undermining it”.
As a result, the Court then dealt with costs. It stated that these were not “financial remedy proceedings” and so the general rule of there being no order as to costs does not apply.
The wife submitted that not filing the agreement in court was equivalent to negligence and so he should not be entitled to his costs. The Court rejected this saying this application was due to the wife, which the husband then resisted. Therefore, the standard costs rules relating to applications should apply, i.e. the husband gets his costs because he won this issue. The wife also submitted that costs should be reduced due to the husband’s refusal of mediation, but the Court stated that he was entitled to refuse it, given the existing agreement, and it would have been “fruitless” to undergo.
24.01.2013Fisher Jones Greenwood v Allen  EWHC 262 (QB)
Key areas: party’s conduct; Indemnity Basis; Basis of assessment; High Court
This was a Part 8 claim by the solicitors against over whether a valid agreement in the main action between the parties was reached in July 2010.
The main action was claim for negligence against the solicitors in relation to a conveyance. The majority of the claim had been struck out on 7th July 2010 due to non-compliance with Unless Orders for disclosure. The solicitors then sought to withdraw a Part 36 offer, and the Court adjourned. During the adjournment, the client attempted to accept the offer. The Parties had a dispute over whether the offer could be withdrawn, with the solicitors claiming that due to the strike-out the offer was worth much more than the claim itself, and so it was only fair to let them withdraw. The Parties then settled this before the judgment on the Part 36 offer was made.
This hearing was concerning whether there was an agreement, and that the client had authorised it.
The Court considered correspondence between the p[arties and noted that although there was reference to any agreement being subject to a Tomlin Order, that was more a formalisation point, than a term of the agreement. As a result, it held there was a valid agreement.
The client submitted that in order to be bound, the agreement had to be signed, which was not done. The Court stated that this was “misconceived” because an agreement can be in writing, or in electronic form, as was the case.
The client then stated that the person who made the agreement was not authorised to do so, because she was simply a “receptionist”. The Court dismissed this on the basis that the fee earner was a qualified solicitor.
The client further submitted that she had been “pressurised” into agreeing the terms. However, the Court held that on the documentation she disclosed didn’t support this argument.
The client finally submitted that the solicitors’ claim of an agreement did not match those of the other side. However, the Court had considered Pleadings from a related claim of hers, which admitted that there was an agreement.
Overall, the Court held that there was a valid agreement. It then turned to costs, and stated that given the client’s “deplorable” conduct, including non-compliance with Part 8 rules, failure to serve documents, making “wild accusations” against the other side’s integrity, serving “dubious” medical certificates, and “seeking unmeritorious adjournments”, she was bordering on contempt of court.
It stated that this led to the other side’s costs being “grossly exacerbated” due to them having to do much more work to understand her case. As a result, costs were awarded against her on the Indemnity Basis.
22.01.2013KC v MGN Ltd.  EWCA Civ 3
Key areas: both parties win some issues; apportionment of costs; Court of Appeal
This ruling was to determine costs arising from a Defendant’s successful appeal against an award of damages in a libel claim.
The Defendant had managed to reduce the damages from £150,000 to £50,000.
On 15th December 2010, the Defendant offered to settle for £50,000.00 plus costs.
After various discussion between the parties, on 15th February 2011, the Claimant made an offer of £80,000 plus costs.
At a meeting on 21st March 2011, the Defendant offered to settle for £50,000.00 plus costs up to 16th December 2010 with the Claimant to pay up to £3000 for the Defendant’s costs thereafter, or a total of £60,000 including costs.
On 4th May 2011 the Claimant made a Part 36 offer of £75,000, which was rejected.
On 23rd September 2011 the Defendant offered to settle for £50,000.00 plus costs up to 16th December 2010. On 6th October 2011, the Claimant made an offer of £50,000 plus costs.
On 23rd December 2011, he Defendant offered to settle for £50,000.00 plus costs up to 5th January 2011.
Given the facts and parties’ offers, the Court held that the Defendant should pay the Claimant’s costs up to 16th December 2010, with no order for costs from that date until 10th April 2011, with the Claimant to pay the Defendant’s costs thereafter, including the costs of the appeal.
17.01.2013R (Farrell) v Investigating Committee of the Architects Registration Board  EWHC 1000 (Admin)
Key areas: Jurisdiction; written submissions; both parties win some issues; High Court
This was a hearing to determine costs incurred in an unsuccessful application for Judicial Review.
The application had been dismissed, with the parties ordered to make written submissions as to costs. The Court then made no order as to costs. However, in the meantime, the Respondent had agreed to the Appellant’s request which had ultimately led to the application, and so the Appellant had obtained his relief sought.
The Appellant submitted that he should be entitled to costs, on the basis of their being a right to reply to a written decision under CPR 23.8(c).
The Respondent submitted that there was no jurisdiction to do so because the parties had agreed that there should be written submissions. The Court rejected this, given that the Appellant was complying with a Court Order.
As a result, the Court then attempted to turn to CPR 3.3(5). However, it noted that it was unable to locate any authority, even in the parties’ submissions, which were in the Appellant’s favour. As a result, it held that it did not have jurisdiction to consider the matter.
15.01.2013R (Naureen; Hayat) v Salford City Council  EWCA Civ 1795
Key areas: liability for costs; Court of Appeal
This was an appeal by the Claimants for their costs from a successful Judicial Review for asylum.
The parties settled the claim, with the Claimants withdrawing their claim due to a change of circumstances: that they had been given exceptional leave to remain by the Secretary of State.
The Claimant submitted that they should be awarded costs because they had achieved the relief sought; they had complied with the Pre-Action Protocol; and the Defendant’s conduct was reasonable.
The Court noted that the claim settled without going to trial, that it settled due to a third party’s intervention; and that the Defendant’s conduct was reasonable. Overall, the appeal was rejected.
11.01.2013HFI Farnborough LLP; HFI Knights Hill LLP; HFI Romsey LLP; HFI Wimbourne LLP v Park Garage Group PLC  EWHC 6 (Ch)
Key areas: both parties win some issues; High Court
This hearing was to determine costs arising from a main action.
The Defendant submitted that they won on all issues apart from one, and should be entitled to their costs.
The Claimant accepted that the Defendant was entitled to costs, but there should be no order on the issues that the Defendant did not win, i.e. there should be an issues-based order.
The Court agreed with the Claimant, but ordered costs relating to a specific expert to be excluded, but to pay all the other disbursements, and for the Claimant to pay 80% of the remainder of the Defendant’s costs.
However, the Court did allow the Claimant permission to appeal the issues that it lost, and for the Defendant to appeal the costs award.
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