2017 – A Year In Costs

Four members of 4 New Square's costs team set themselves a challenge to come up with a calendar of key costs decisions in the last year. 1 case per month, 100 words max per case.

January

Thakkar v Patel [2017] EWCA Civ 117

The trial judge's costs order (that the Defendant pay 75% of the Claimant's costs) reflected his finding that the Defendant had acted unreasonably: after both sides had agreed to mediate, the Defendant's inaction caused mediation to be abandoned.

The Court of Appeal upheld the decision. Jackson LJ said:

"in a case where...mediation is obviously appropriate, it behoves both parties to get on with it. If one party frustrates the process by delaying and dragging its feet for no good reason, that will merit a costs sanction."

(Stephen Innes)

February

Merrix v Heart of England NHS [2017] EWHC 346 (QB)

Carr J determined that in a standard basis assessment the court would not depart from the receiving party's last approved or agreed budget unless a good reason was shown, whether the receiving party claimed less, the same as, or more than the sums budgeted.

If the receiving party had spent less than was approved in the budget, the indemnity principle would require departure from the budget.

(Stephen Innes)

March

In the matter of RBS (Rights Issue Litigation) [2017] EWHC 1217 (Ch)

Hildyard J ordered a commercial funder who might ultimately be subject to a non-party costs order to give security for costs under CPR 25.14.

It was relevant to consider (a) whether the non-party was motivated by a commercial interest in the litigation, (b) whether there was a real risk of non-payment, (c) whether (less relevantly with commercial funders) a risk of liability for costs had been sufficiently communicated to the non-party, and (d) whether there were factors, such as a delay, to tip the overall balance against making an order.

Importantly, the applicants were ordered to give a cross undertaking.

(Stephen Innes)

April

Peter Mills Dammermann v Lanyon Bowdler LLP [2017] EWCA Civ 269

The Court of Appeal clarified that, for the purposes of deciding whether an appellant had behaved unreasonably within CPR 27.14(2)(g) in pursuing an appeal in a small claims track matter, the test was to enquire whether his conduct permitted of a reasonable explanation. If so, the course adopted might be regarded as optimistic and as reflecting on the appellant's judgment or that of his legal advisers, but it would not be unreasonable.

Whilst judges should apply...