When winning is also losing

In Mathieu v Hinds & Anor (No. 2: Costs) [2022] EWHC 1624 (QB) the Claimant briefly basked in the warmth of a win at Trial but, like the British weather, the forecast changed and their day was dampened when their win turned into a significant loss on costs – before they even reached Bill drafting stage or Detailed Assessment.

The Claimant was involved in a very serious life changing accident which the Defendant admitted liability for. He was awarded a six figure sum in his clam for provisional damages following a ten-day quantum only trial. However, he only succeeded on part of his claim for provisional damages and the final damages sum awarded to the Claimant equated to around 9.5% of the amount claimed on the final Schedule of Loss. The Claimant had beaten the Defendant’s pre Trial Part 36 offer but not a Calderbank offer.

The “usual” Order for costs, that the Claimant’s costs be paid by the Defendant to be subject to assessment, was sought. The Defendant contended that the Claimant had not “won” resulting in the Defendant seeking an Order for their costs to be paid by the Claimant and other in the alternative Orders.

Also, an Application to revise costs budgets was made by the Claimant prior to Trial but there was insufficient time at Trial to deal with the Application

The Key issues considered

  • Costs orders in partial success cases

– Who has succeeded overall?

– Do costs follow the issue or the event?

– Where there is a discrete issue which caused additional costs to be incurred, which the Claimant was ultimately unsuccessful on, who is responsible for those costs?

 

  • Conduct

– Was it reasonable to pursue “the issue” which was ultimately unsuccessful?

– Was “the issue” “discrete” and “distinct”?

– Did “the issue” lead to material additional costs?

– Was the claim conducted reasonably?

– Was it reasonable to proceed and fail to beat offers which are not Part 36 offers?

– How is an issue-based cost order justified and, if one is considered appropriate, is payment of a proportion of the receiving party’s costs more practicable?

– How does the Court make an order that reflects the overall justice of the case, having regard to the issues and CPR 44.2?

  • Payments on account in respect of costs and departure from costs budgets
  • What is the appropriate award and is anything to be allowed for the departure costs sought in the Application to vary the budget.?

  The Result:

After determining that “the issue” was raised reasonably, but that the claim was not conducted reasonably, the Court determined that “the Claimant should be deprived of some of his costs to reflect “the issue””.  Consideration to CPR 44.2 was given and to what Order was appropriate that reflects the overall justice of the case, having regard to the issues.

As a result, two percentage reductions were eventually made to the Claimant’s recoverable costs, which were still to be subject to Detailed Assessment:

  • A 15% reduction was made to the Claimant’s recoverable costs up to the expiry of the Defendant’s Calderbank offer.
  • A further reduction of 60% was applied to the Claimant’s recoverable costs, post expiration of the Defendant’s Calderbank offer.

60% of the Claimant’s costs budget incurred costs and 90% of the budgeted costs (subject to the percentage reductions (above)) were also Ordered to be paid by way of interim payment on account of costs. Nothing was allowed in respect of the Application to revise costs budgets which was to be determined at Assessment.

This is certainly a case which deserves a read, together with the various related caselaw referred to throughout.

Do you have a case that you fear may fall foul of an issue based costs Order and do you need some guidance in this regard? Please contact the writer, Charlene Turner here who will be more than happy to give you a call.