31.10.2013JJ Food Service Ltd. v Zulhayir  EWCA Civ 1304
Key areas: costs capping; Court of Appeal
This was an application for costs from a successful appeal.
The Appellant had won in the Employment Tribunal, and lost in the Employment Appeal Tribunal, but managed to get the original ruling reinstated by the Court of Appeal.
The Respondent also applied for a costs-capping order under CPR 52.9A.
Permission to appeal was granted in February 2013, but the Respondent’s application was not made until June.
In the circumstances, the Court held that the requirement for such an application to be made “as soon as practicable” was not complied with, and so was rejected.
As a result, the Appellant was awarded its costs on the Standard Basis, up to the date that the Respondent obtained coverage under legal aid.
29.10.2013R (Smoke Club Ltd.) v Network Rail Infrastructure Ltd.  EWHC 3830 (Admin)
Key areas: Judicial Review; High Court
This was a hearing to determine costs arising from a Judicial Review.
The Application had been refused permission on paper, but after applying for a renewal application, the Claimant served a Notice of Discontinuance before the hearing took place.
The general rule is that successful Defendants are allowed their costs of acknowledging the application, but not the costs of the hearing.
The Defendant submitted that it should be entitled to its costs up to the date of the discontinuance, due to CPR 38.61.
The Court held that the CPR did not override the general rule.
The Defendant then submitted it should be entitled to its costs on the basis that the claim was “hopeless”.
The Court held that the first and third issues raised by the Claimant were hopeless; that the second issue was not hopeless, but simply unarguable; while a fourth was a mixture.
Overall, the Defendant was awarded all of their costs relating to acknowledging the claim, and a third of subsequent costs.
23.10.2013PGF II SA v OMFS Company 1 Ltd.  EWCA Civ 1288
Key areas: mediation; party’s conduct; Court of Appeal
This was an appeal on a costs order retailing from a main action.
The Claimant accepted the Defendant’s Part 36 offer out-of-time.
At first instance, it was held that because the Defendant had not responded to the Claimant’s suggestion to mediate the claim, it had unreasonably refused and should be penalised on costs, and no costs were ordered from the date the offer expired.
The Defendant appealed on the basis that silence did not mean a rejection, but, if it did, their rejection was reasonable. The Claimant cross-appealed on the grounds that not responding was the same as a refusal.
The Court held that as a general rule, silence is unreasonable, because a reasoned response could encourage parties to re-consider their position on the claim as a whole.
However, it held that on the facts a refusal would have been justified.
Overall both appeals were rejected, with the Defendant to pay the Claimant’s costs of both the appeal and cross-appeal.
18.10.2013Davison v Leitch  EWHC 3092 (QB)
Key areas: Part 36 offer; Basis of assessment; High Court
This was a trial of a main action, with a subsequent ruling on costs.
The Claimant had obtained a judgment in a claim for clinical negligence.
In the main proceedings the Claimant had made a Part 36 offer for £900,000 and the Defendant for £800,000.
The Court stated that the Claimant had beaten her own offer at trial “by a very significant margin”, and given the facts when the Claimant made her offer, it “would not be unfair” to invoke CPR 36.14.
The Claimant was therefore awarded an additional £75,000 on top of her damages, but her costs were to be assessed on the Standard Basis.
17.10.2013Bentine v Bentine  EWHC 3098 (Ch)
Key areas: Solicitor/Own client; costs of assessment; Solicitors Act 1974; High Court
This was an application to determine costs of a Solicitor/Client assessment under the Solicitors Act 1974 (“1974 Act”).
The costs as claimed had included costs for which it was held that there was no retainer; some on the grounds of the client not having capacity; others because they related to the costs of assessment. The claim for costs relating to assessment had been withdrawn before the hearing, but those that were subject to the capacity argument were still claimed.
If these costs had been taken into account when assessing the total amount allowed, the bill would have been reduced by more than 20%, which would have entitled the Client to her costs of the assessment. If they were to be excluded from the calculations, then the claim would have been reduced by less than 20%, and so the ex-solicitors would be entitled to their costs.
The Court noted that this disputed had not arisen since the 1974 Act came into force, but there had been a ruling in 1936 on this issue (Re a Solicitor (1936)), under the Solicitors Act 1932, in which it was held that the costs struck-out for lack of retainer should be taken into account. The Client submitted that it was still good law.
The Defendant submitted that this had been overruled by the wording of the 1974 Act, and, in any event had not been struck-out, and the client in this case had not raised issues of lack of retainer, but the Costs Judge himself did.
The Court that there was a difference between items disputed under the retainer, and those that fall outside the retainer.
It also held that the costs relating to assessment costs relate to work done against the client, not in their favour, and so “are outside the scope of the assessment”.
As a result, the Court held that Re a Solicitor (1936) did not apply. However, in the circumstances, it held that the solicitors were to pay the costs of assessment given their conduct in relation to the client’s capacity.
11.10.2013The Board of Trustees of National Museums & Galleries on Merseyside v AEW Architects & Designers Ltd.  EWHC 3025 (TCC)
Key areas: Basis of assessment; costs budgets; High Court
This was a hearing to determine costs issues arising from a successful claim.
The Claimant submitted that they should be entitled to 100% of their costs, all of which should be on the Indemnity Basis, due to the Defendant’s conduct in relation to late admissions of liability; disclosure of documentation; and their refusal to attempt a settlement.
The Defendant submitted that the Claimant should only be entitled to 60% of their costs, to be assessed on the Standard Basis, due to their late disclosure of documentation and late instruction of an expert.
The Court noted that the Claimant did delay matters by their late instruction of an expert to quantify the claim, but due to the parties’ liability experts being until to come to an agreement, it was not unreasonable.
It also noted that the Defendant was fully aware of the extent of the claim, but did not attempt to settle at a level that was close to the judgment sum. However, nor did the Claimant’s offers.
Overall, the Claimant was awarded all of its costs, but on the Standard Basis.
The Court then turned to the Claimant’s cost budget, which had been approved at £497,727.57. However, a year later, their costs were estimated at £1.1 million, but the Court noted that this was due to a Third Party being dragged into the claim, which was unforeseeable, and the value of the claim had changed substantially. It stated that it would have instead approved a budget of £1 million, and based upon this figure, allowed an interim payment of £700,000.
09.10.2013Harcus Sinclair (a firm) v Buttonwood Legal Capital Ltd.; Rylatt Chubb (a firm); Alternative Real Estate Fund Ltd.; Roskill Advisors (Cayman) Ltd.  EWHC 2974 (Ch)
Key areas: non-party costs orders; funding; High Court
This was an application for a costs order against a losing party’s solicitor.
The Claimant submitted that the solicitors were a party to the claim, and so were liable for costs. However, the Court held the solicitors were not involved in the issue on which it made its ruling, and so were not a party to that issue.
The Claimant then sought a non-party costs order against them, on the basis that the solicitors had funded the claim.
The Court that the solicitors had simply acted under a CFA, and there was nothing in their conduct that justified an order against them.
Overall, the application was rejected.
03.10.2013CG Group Ltd. v Breyer Group Plc  EWHC 2959 (TCC)
Key areas: Basis of assessment; party’s conduct; High Court;
This was a hearing to determine costs arising from a main action.
The main action had been a set of proceedings to enforce a ruling of an Adjudicator. The Claimant won and so the Adjudicator’s ruling was upheld.
The Claimant therefore submitted that they should be entitled to their costs, which should be assessed on the Indemnity Basis due to the Defendant acting unreasonably by raising defences of jurisdiction and a breach of natural justice.
However, the Court held that while the jurisdiction argument was weak, the natural justice argument was “not without some merit”.
Therefore, the Claimant was awarded its costs, but on the Standard Basis, which were then summarily assessed at £18,000 out of a claim of £22,294 and a further claim of £3,767.40.
02.10.2013R (on the application of Mousa & Ors) v Secretary of State for Defence  EWHC 2941 (Admin)
Key areas: Judicial Review; both parties win some issues; Legal Aid; High Court
This was a hearing about costs from a previous ruling in a set of Judicial Review proceedings, and issues relating to its future conduct.
The Defendant submitted that because they had won the major issue, but had lost on a smaller but related issue, they should be entitled to 75% of their costs.
The Court stated that they were two separate issues, and each party won one of them. However, the issue that the Defendant won was more substantial, and so they should be awarded a percentage of their overall costs, but because of the difficulty in doing so, the Court was not willing to specify a figure. Instead, the Court said that there should be a set-off of the parties’ costs.
However, the Claimant was legally-aided, under a “high costs case plan”, and so he submitted that there should not be a set-off given the difference in rates that could be charged. Therefore, the Claimant submitted that there should be an issues-based costs order instead.
The Defendant submitted that because of legal aid being in place, the only fair way overall was to allow a set-off because their costs would not be enforceable, a referred to s.22(4) of the Access to Justice Act 1999.
In the circumstances, the Court held that it no option but to order a set-off of the Claimant’s costs of the issue he won against those relating to the issue on which he lost.
02.10.2013Berntsen; Richardson v Tait; Rayment  EWCA Civ 1520
Key areas: interim payment; Court of Appeal
This was an appeal against an order that the Claimants pay 85% of the Defendants’ costs of an application to strike-out, and that they pay £45,000 on account.
The Claimants’ appealed that they could not afford the interim payment, and would stifle a genuine claim; and that it went against CPR 1.1. The Defendants submitted that the original order was correct given the facts.
The Court noted that the first-instance judge had taken into account the Claimants’ means when making his decision, but noted that they had not provided any evidence as to how they were to fund the proceedings.
As a result, the Court held that the judge was correct and so the appeal was dismissed.
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