28.11.2014AB v Ministry of Justice  EWHC 3934 (QB)
Key areas: party’s conduct; High Court
This was a ruling on costs issues resulting from a main action. The Claimant was awarded two sets of damages: one for nominal damages; one for £2,250.00.
Both parties submitted that they should be entitled to all of their costs.
At a Pre-Trial Review on 20th January 2014, the Claimant accepted the Defendant’s proposal that the trial should only deal with issues relating to his wife’s death. The parties agreed to deal with costs separately.
As a result, the Court had to decide whether the other issues had been abandoned. It held that it was not a case of the Claimant using stronger arguments over weaker ones, but had changed his position. It also held that only 20% of the total documentation in the case related to the issue that went to trial.
Overall, the Court held that the Claimant should pay 80% of the Defendant’s costs up to the Pre-Trial Review; with the Defendant to pay 20% of the Claimant’s costs up to that point, and all of the Claimant’s costs thereafter.
27.11.2014The Secretary of State for Communities and Local Government v Venn  EWCA Civ 1539
Key areas: Protective Costs Order; Court of Appeal
The Secretary of State appealed against a Protective Costs Order (PCO) which would limit their claim for costs in an application to £3,500.00.
At first instance, the Claimant submitted that her application was covered by CPR 45.41, or that the Court should use its own powers to limit her costs exposure as her claim related to art. 9(3) Aarhus Convention. The Secretary of State submitted that the Convention did not apply because it was not a Judicial Review; that the relevant section she relied on did not fall under the Convention; and that there was no need to make a PCO in this case. The Court held that the section did fall under the Convention; that it was not a Judicial Review, and that she should use her discretion to make a PCO.
On appeal, the Court held that the section did fall under the Convention, otherwise it would not be enforceable.
The Secretary of State submitted that CPR 45.41 did not affect principles on PCOs in statutory appeals and applications. It was accepted that if Aarhus applied, then there would be a breach if a PCO was not granted.
In relation to discretion, the Claimant submitted that CPR 45.41 drew a distinction between Aarhus cases and other environmental cases.
The Claimant also suggested that the Secretary of State’s position would mean that its coverage would differ depending upon who made the original decision, not the impact it had on the environment. The Secretary of State agreed with this.
On appeal, the Court held that CPR 45.41 was a big change from the previous position, and that it was deliberate. As a result, it held that CPR 45.41 “is not compliant” with the Aarhus Convention as it excludes statutory appeals, and allowed the appeal.
27.11.2014Dufoo v Tolaini; DA Phillips & Co. Ltd.; Pannell; Quiet Moments Ltd.  EWCA Civ 1536
Key areas: third party contribution; Court of Appeal
This was an appeal against a costs order.
At first-instance the Judge ordered that there be no costs between the First Respondent and the Second and Third Respondents, which he stated was to reflect an agreement between those parties. The Appellant was ordered to pay 80% of the First Respondent’s costs, and that on an issue relating to a loan, there should be no costs between the Appellant and Second and Third Respondents.
The Appellant submitted that he won on the loan issue; and that all the Respondents caused him to incur costs due to their actions, and so they should make a third party contribution towards them. The Second and Third Respondents submitted that the Judge made a correct ruling on the overall winner of the loan issue, and the Court agreed.
On the contribution issue, the Appellant submitted that the agreement between the First, Second and Third Respondents prevented an order that they indemnify other parties.
The Court held that this was correct given that the Appellant was not a party to the settlement agreement, and so set aside that part of the order. However, after considering the facts of the case, the Court held that it should be remitted back to the trial judge to reconsider, because he would be in a better position to make a decision.
21.11.2014Merck KGaA v Merck Sharp & Dohme Corp & Ors (Costs)  EWHC 3920 (Ch)
Key areas: preliminary issues; High Court
This was a judgment on costs issues arising from preliminary issues in the Claimant’s favour regarding the applicable law.
The Claimant submitted that it should be entitled to its costs in full. The Defendant stated that there should be no order as to costs, or that it should only have to pay a percentage of the Claimant’s costs.
The Court noted that the Defendant had sought to issue the application of the preliminary issue.
The Defendant submitted that both sides were reasonable in their position that alternative jurisdictions applied. The Court agreed.
The Defendant then suggested that most of the work would have been required in any event. The Court doubted this given that it went into the history starting in the 1890s.
The Defendant then submitted that it was successful on a sub-issue. The Court agreed, but held that this was not a reason not to award costs.
The Defendant turned to quantum, stating that the costs were disproportionate, and that only a percentage should be payable. The Court stated that proportionality did not prevent an order for costs, and that there was no reason for a percentage reduction.
Given its dismissal of the Defendant’s points, the Court ordered that the Defendant pay all of the Claimant’s costs of the preliminary issues on the Standard Basis.
21.11.2014O’Rourke Construction Ltd. v Healthcare Support (Newcastle) Ltd.; Newcastle upon Tyne Hospitals NHS Foundation Trust  EWHC 3847 (TCC)
Key areas: both parties win some issues; High Court
This ruling was to determine costs issues arising from a main action.
The Claimant stated that it was entitled to all of its costs because it won; the Second Defendant submitted that the Claimant had only achieved one declaration out of the seven sought, and even that was only allowed in a version that the Second Defendant suggested was correct. The First Defendant submitted that its position was closest to that the Court held applied, and so it should be awarded it costs, to be paid by either of the other two parties.
The Court held that its ruling was “fundamentally different” to that which the Second Defendant should apply, but a lot of time was spent due to the Claimant raising issues that failed. The Court also noted that its ruling was nearer the First Defendant’s position than the Claimant’s, but that the First Defendant was not completely successful.
As a result, the Claimant was awarded 70% of its costs to be paid by the Second Defendant, and 100% of its costs relating to costs submissions, both of which were on the Standard Basis. The First Defendant was awarded 90% of its costs.
20.11.2014Assaubayev & Ors v Michael Wilson & Partners Ltd.  EWCA Civ 1491
Key areas: Solicitor/Own client; Court of Appeal
This was an appeal against a ruling that a claim against the Respondent’s legal fees be stayed.
The Respondent is not a firm of solicitors, not a “recognised body” under s. 9 Administration of Justice Act 1985, or otherwise authorised under the Legal Services Act 2007. However, it did act for the Appellants in a legal dispute, and invoice them over US$8.9 million, and had been paid US$3 million.
The Appellant’s issued a Part 8 claim in the SCCO to set aside the retainer; for a Bill of Costs; and a solicitor/client assessment. The Respondent applied to get the claim set aside due to an arbitration clause. The SCCO rejected the application for a stay; and held that the arbitration clause could not be relied upon because the Respondent has given the impression that they were a firm of solicitors.
The Appellant modified their claim to seek a declaration that the invoices were not enforceable, but this was struck-out because the Respondent is not a firm of solicitors. A request for a ruling that the Court had supervision over the Respondent was stayed pending the outcome of arbitration.
The Court held that if the Respondent sought to act as a solicitor, it could not be held to be one, even though it is a company, and would be causing an offence under s. 20 & s. 24Solicitors Act 1974.
However, on the facts it held that it was right to grant a stay.
20.11.2014Group M UK Ltd. v Cabinet Office  EWHC 3863 (TCC)
Key areas: party’s conduct; summary assessment; High Court
This was a hearing to determine costs of an Interested Party arising from trial.
The parties had initially suggested that they would be likely to agree costs, but were unable to do so.
Costs totalling £70,072.50 were ultimately claimed, and to be dealt with via Summary Assessment. However, the Interested Party did not serve its N260 until 3 hours before the hearing, not 24 hours before as the Practice Direction required.
The Defendant submitted that as a result, they were in breach and should not be entitled to any costs at all.
The Court held that the breach was serious, and caused the parties to have to prepare written submissions in light of the hearing.
However, it held that the non-compliance was “totally understand[able]” due to the timing of the hearings, and that it was unlikely that it could have been prepared any sooner.
The Court also held that it would be “wholly unjust” to disallow all costs, and that the extra costs incurred would be “minimal”. The costs were then dealt with by Summary Assessment.
14.11.2014Hegglin v Person(s) Unknown & Google Inc.  EWHC 3793 (QB)
Key areas: costs budget; High Court
This was a hearing to determine interim applications, including whether a costs-capping order should be made in advance of a 5-day trial listed for 24th November 2014, and the costs of those applications.
The Claimant had served a Costs Budget totalling £604,405 and the Second Defendant had served one for a total of £1,681,310.41.
The Court held that the Second Defendant’s costs budget was “surprising”; was disproportionate; and included irrecoverable costs.
The Claimant submitted that the Second Defendant’s costs should be capped at £1.25 million because it no idea of the size of its costs until the costs budget was served; that there had not been any costs management to-date; and there was a “substantial” imbalance between the parties.
The Court agreed with these points, but held that the Claimant should have applied at an earlier date.
The Second Defendant stated that no cap should be applied because most of the costs have already been incurred; and because Detailed Assessment will deal with proportionality issues. The Court agreed with this stance.
However, the Court also held that the Second Defendant had not conducted its case in a proportionate manner, and noted that its estimated trial costs are more than double the Claimant’s. As a result, it reduced certain items in the Second Defendant’s costs budget.
As for the costs of the application, given the impact on the Second Defendant’s overall costs, the Claimant was awarded 75% of his costs of that application.
The Court also dealt with the costs of two other applications, both of which were under CPR 18: one by the Claimant for disclosure relating to usage of google.com within the UK, and for specific disclosure; one by the Second Defendant for disclosure from the Claimant for email correspondence. The Second Defendant conceded the google.com issue, and lost its own application, but did not have to make any specific disclosure. As a result, the Claimant was also awarded 75% of the costs of these two other applications.
13.11.2014Tchenguiz v Director of the Serious Fraud Office; HM Procureur for Guernsey; Rawlinson & Hunter Trustees SA  EWCA Civ 1471
Key areas: Indemnity Basis; Basis of assessment; party’s conduct; Court of Appeal
This was an appeal against an order for costs in an interim application to be assessed on the Indemnity Basis.
At first-instance the Claimant had issued an application for disclosure under CPR 31.22 which had been held to be “extraneous”, and the SFO was awarded its costs on the Indemnity Basis on that ground.
On appeal, the Claimant submitted that Indemnity Basiscosts should not have been awarded because the SFO could always have agreed to the application; that applications under CPR 31.22 should be granted on the interests of justice; and that the ruling would encourage unnecessary litigation.
The SFO submitted that the ruling was analogous to Norwich Pharmacal applications for third party disclosure, where the third party’s costs are paid by the Applicant. The SFO submitted that it was therefore entitled to resist on public interest grounds.
On appeal, the Court held that the Judge had “ample grounds” for his decision, and the SFO was entitled to resist the application, which created a lot of work, and it was successful in doing so.
As a result, the appeal against the order for the SFO’s costs to be assessed on the Indemnity Basis was dismissed.
10.11.2014Richmond Pharmacology Ltd. v Chester Overseas Ltd.; Levine; Levine  EWHC 3418 (Ch)
Key areas: Basis of assessment; Indemnity Basis; party’s conduct; High Court
This judgment was a ruling on costs arising from a main action that went in the Defendants’ favour.
The Defendants sought costs on the Indemnity Basis, as they submitted the claim was “bound to fail”, and “unsustainable” on its own evidence; that the Claimant refused to accept the Defendants’ explanations, which turned out to be correct; and that the Claimant had acted unreasonably throughout the case.
The Court noted that these arguments would not be enough on their own would justify Indemnity Basis costs, but after taking into account the facts, ordered that Indemnity Basis would apply, albeit only after the parties had made their initial disclosure.
Thomas Legal Costs
12 Token House Yard
DX 138752 CHEAPSIDE
18 Park Street
T: 020 7073 2600
F: 020 7073 2955