This month’s costs cases summaries: appeals, unjust enrichment and Mitchell

Mitchell case: from the gates of Downing Street to the Court of Appeal

Our monthly summary of key costs-related court decisions is provided by CaseCheck

Simpson & Ors (t/a Harrow Solicitors and Advocates) v Godson & Ors [2013] EWCA Civ 1339

Application for permission to appeal a costs order following the grant of summary judgment in a claim for the return of sums obtained by forged cheques drawn on a firm’s accounts.

Permission to appeal granted. Held: The order was drafted too broadly and did not reflect that the claimant had succeeded in obtaining summary judgment against the defendant for a smaller sum. Defendant ordered to pay 25% of the claimant’s costs of the application against her, the remaining to be costs in the case. Costs to be paid to be assessed on the standard basis but not to be enforced without permission of the court (section 11, Access to Justice Act 1999).

Full ruling here.

Salekipour v Parmar & Ors [2013] EWCA Civ 1376

Following a judgment refusing permission to appeal, the court requested submissions on whether the effect of an order stating that the appellant, a third party, was liable for costs ‘in accordance with the default costs certificate’ issued against the claimant only, was to remove their opportunity to challenge the extent of their liability in the Senior Court Costs Office (SCCO).

Order refusing permission to appeal recalled. Held: In the present case, the judge was wrong to order that the costs to be paid by the third party pursuant to section 51(3), Senior Courts Act 1981 should be those shown in the default certificate. The certificate was not binding on the appellant, who should have been provided with an opportunity to be heard on the respondents’ costs schedule.

Full ruling here.

Scott v Russell [2013] EWCA Civ 1432

Application to appeal costs orders against a litigant in person made by the employment tribunal and Employment Appeal Tribunal (EAT) on the basis of the unreasonable conduct.

Application refused. Held: Employment tribunals are entitled to take a broad brush approach on questions of costs, looking at the totality of the relevant circumstances. It is not necessary to analyse each component of conduct or to determine a precise causal link.

Challenges to costs orders are particularly difficult because they generally involve challenges to the exercise of judicial discretion on which experienced judges may sensibly differ. In particular, a challenge will face formidable difficulties where there is a sufficient factual basis for striking out claims and a finding that a claimant has acted vexatiously, abusively, or unreasonably.

In the present case, the applicant sought an inappropriate over-analysis. The EAT was exercising its broad discretion and sufficiently identified the relevant unreasonable conduct and its effect.

Full ruling here.

TFL Management Services Ltd v Lloyds Bank Plc [2013] EWCA Civ 1415

Appeal against strike-out raising the issue of whether an unsuccessful claimant may recover costs against a third party who benefits from the final judgment on the ground of unjust enrichment. The respondents sought summary judgment.

Appeal allowed. Application for summary judgment refused. Held: The courts do not normally award parties the costs of issues on which they have lost against counterparties who have taken no part in the proceedings. However, whether the benefit conferred on the third party was incidental and therefore an exception to unjust enrichment was a distinct and undecided point of law better decided against actual rather than assumed facts.

Sir Stanley Burnton, dissenting, found the claim sought to circumvent the costs jurisdiction of the court and lacked a justiciable basis.

Full ruling here.

Mitchell MP v News Group Newspapers Ltd [2013] EWCA Civ 1537

Application for relief from sanctions limiting the appellant’s costs budget to court fees due to a failure to file a budget in time raising the issue of the correct approach to non-compliance with Civil Procedure Rules.

Appeal dismissed. Held, inter alia: The overriding objective to consider the need, first, for litigation to be conducted efficiently and at proportionate cost and secondly, to enforce compliance with rules, practice directions and court orders, are of paramount importance and to be given greater weight.

In relation to CPR 3.9, the starting point is a consideration of the nature of the non-compliance. If it is trivial, the court will usually grant relief provided an application is made promptly. Applications for an extension of time made before time has expired will be looked upon more favourably than applications for relief from sanction made after the event.

If the non-compliance is not trivial, the burden is on the defaulting party to persuade the court to grant relief. Good reasons are likely to arise from circumstances outside the control of the party in default. Merely overlooking a deadline, whether on account of overwork or otherwise, is unlikely to be a good reason.

An application for relief from a sanction presupposes that the sanction has been properly imposed and complies with the overriding objective. If a party wishes to contend that it was not appropriate to make the order, that should be by way of appeal or, exceptionally, by asking the court which imposed the order to vary or revoke it under CPR 3.1(7), applying the Tibbles [2012] EWCA Civ 518 criteria. It is not open to that party to complain that the sanction does not comply with the overriding objective or is otherwise unfair.

In the present case, the master was entitled to make the order, which she did in the knowledge that the claimant would have the opportunity to apply for relief. The decision to impose the sanction was in accordance with the overriding objective. The master did not err in applying the CPR 3.14 sanction by analogy. The result was not a Draconian costs sanction but a justified penalty in light of the revised regime. CPR 3.14 could not be interpreted as being directed only to the case of a party who files no budget – such an interpretation would defeat the overriding objective.

Full ruling here and Litigation Futures story here.


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