23 January 2014Print This Post

This month’s costs cases summaries: he’s not a costs specialist, he’s a very naughty boy

From the West End to the High Court: Spamalot show dispute

Forstater & Anor v Python (Monty) Pictures Ltd & Anor [2013] EWHC 3759 (Ch)

Judgment on costs in a multiple party and causes action concerning royalties arising from the play Spamalot.

Held, inter alia: Even in a case of modest factual or legal complexity, a broad-brush approach is appropriate to a determination of costs, which must be within proportionate and reasonable limits (F&C Alternative Investments (Holdings) Limited v Barthelemy [2011] EWHC 2807 (Ch) affirmed). When exercising its discretion to make an order for recoverable costs, the court must take care not to make provision for matters properly considered by the costs judge in the course of assessment.

Departure from the presumption that a claimant who discontinues is liable for costs is justified where discontinuance is brought about by unreasonable conduct. Practical or pragmatic reasons are, of themselves, insufficient. However, abandonment of unsustainable claims should not be undermined by awarding indemnity costs, save where conduct is far outside the norm.

Relief from sanctions for non-disclosure of information concerning funding arrangements depends on the circumstances of the case, having regard to both the need for litigation to be conducted at proportionate cost and enforcement of compliance with the rules. Failure to comply with a rule of general application, which has no discernible impact on the conduct of the action and is complied with in substance, albeit not technically, may justify relief.

In the present case, costs orders were made following the broad-brush approach. Although the effect was to exempt an unsuccessful claimant from some personal liability, no real injustice was caused. Relief from sanctions granted on the basis that the conveying of the requisite information in a letter instead of on form N251 had no discernible impact on the conduct of the action.

Indemnity costs justified where a claim for a minimal sum was pursued to trial for the sake of guaranteeing recovery of costs in the face of an offer to let a costs judge adjudicate on the issue.

Judgment not revised after Mitchell [2013] EWCA Civ 1537 on that basis that it proceeded “upon correct principles” (at [63]).

Full ruling here and Litigation Futures story here.

XYZ v Various companies (PIP Breast Implant Litigation) [2013] EWHC 3643 (QB)

Application by claimants in group litigation for damages for defective breast implants seeking disclosure of the nature and extent of the second defendant’s liability insurance.

Held: CPR 18 cannot be interpreted as granting the court the discretion to order disclosure of a defendant’s insurance position where that information does not relate to any matter in dispute.

Nor does CPR 3.1(2)(m) empower the court to make an order requiring a defendant to disclose whether it has sufficient insurance to meet any order for damages or for costs, although witness statements setting out whether insurance is adequate for participation in the litigation may be ordered for case management purposes to ensure the court’s control over its resources.

In the present case, an order requiring the defendant to provide a witness statement setting out whether insurance was adequate to fund participation in the litigation to the completion of the trial and conclusion of any appeal was appropriate to enable case management on the basis of adequate information. Further, the order was in accordance with the overriding objective, gave no unfair advantage to the claimants and did not prejudice the defendant.

Full ruling here.

Caucedo Investments Inc & Anor v Saipem SA & Anor [2013] EWHC 3375 (TCC)

Dispute as to the costs associated with an order enforcing an arbitration award served out of jurisdiction.

Held: The overriding objective to act in a cost-efficient and proportionate way applies not only to the court but also to the parties. The question is whether it was reasonable and proportionate to seek permission to serve out of the jurisdiction and then, having obtained such permission, to take reasonable steps to do so.

In the present case, it was not unreasonable for the claimants to serve out of jurisdiction and the defendants were given numerous opportunities to avoid the associated costs. Costs claimed reduced on summary assessment on the basis that some elements were disproportionate.

Full ruling here.

BMG (Mansfield) Ltd & Ors v Galliford Try Construction Ltd & Ors [2013] EWHC 3468 (TCC)

Judgment concerning the costs of a claimant’s application to amend their claim and costs of instructing a fresh expert.

Held: While also reflecting the court’s overall conclusions, an order for costs should be as simple as possible to implement and not give rise to unnecessary and time-consuming analysis of the parties’ costs.

In the present case, the costs order made did not exactly mirror the court’s conclusions to minimise the cost of assessment. Defendants to pay 50% of the claimant’s costs of the applications. Costs of instructing a fresh expert not recoverable. Costs of amendments to be borne by the claimant.

Full ruling here.

SC DG Petrol SRL & Ors v Vitol Broking Ltd [2013] EWHC 3920 (Comm)

Application for an extension of time and relief from the sanction of strike out for failure to comply with orders for security for costs. A subsequent application for variation or revocation was not before the court.

Held: When considering an application for an extension of time in a case of any complexity, regard should be had to the amended CPR 3.9(1), which requires the court to consider all the circumstances of the case and to have regard to the overriding objective. Sayers v Clark Walker (a firm) [2002] EWCA Civ 645 affirmed and applied.

When considering an application for relief, the considerations that litigation be conducted efficiently and at proportionate cost and the need to enforce compliance with rules, practice directions and orders are given paramount importance. Relief will only be granted if the defaulting party shows good reason for non-trivial non-compliance, such as those arising from circumstances outside of their control.

An application presupposes that the sanction has in principle been properly imposed. A party wishing to contend that the sanction was not appropriate must apply for variation or revocation of the order under CPR 3.1(7). Per Mitchell v News Group Newspapers Limited [2013] EWCA Civ 1537.

Whether circumstances beyond the case in hand justify relief is a matter for the court and not a tactical weapon in the arsenal of the non-defaulting party. The examples provided in Mitchell are illustrations of principle and not exhaustive. Obiter, the jurisdiction to extend time and grant relief should not involve the court being referred to other decisions on other facts.

Application refused. Although non-compliance was not trivial, the provision of security was justified, there was no good reason for default and the period for compliance originally imposed was not unreasonable.

Full ruling here and Litigation Futures story here.

Harrison & Anor v Black Horse Ltd [2013] EWHC B28 (Costs)

Application for relief from sanctions for failing to serve notice of a Court of Appeal conditional fee agreement in order to recover success fees.

Held: The purpose of the requirement that a party discloses its funding arrangements is so that the other party may know that it may face a liability to pay success fees or insurance premiums if it is ordered to pay costs.

The automatic sanction for failure to serve notice of a change in funding is that the defaulting party cannot recover success fees unless relief is granted by the court. In an application for relief, the onus is on the defaulting party to show good reason for a non-trivial failure (CPR 3.9(2)).

The circumstances of the case are relevant to a consideration of relief, although the overriding objective (CPR 3.9) is given paramount importance. Guidance in Mitchell followed. Forstater distinguished on the facts: that case related to a trivial failure of form rather than substance.

Application refused. In the present case, although the failure was not intentional, there was evidence that the defendant was prejudiced in that it would have been given different advice in relation to settlement.

Full ruling here and Litigation Futures story here.

By admin


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