Case No: 1997/1939
 
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
COMMERCIAL COURT

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 21 November 2001

B e f o r e :

THE HONOURABLE MR JUSTICE THOMAS
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	QUORUM A S		Claimants	
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	Charles William  SCHRAMM
(Sued on his own behalf and on behalf of all other members of Lloyd’s subscribing to policy 497 91 NO276)	Defendants	

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Mr Dominic Kendrick QC and Mr Michael Ashcroft (instructed by Bryan Cave) for the Claimants
Mr Nicholas Davidson QC and Miss Sue Carr (instructed by Pinsent Curtis Biddle) for the Defendants
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JUDGMENT ON INTEREST AND COSTS

Mr Justice Thomas: 

1.	On 7th August 2001 I gave judgment in favour of the claimants.  Because of the long vacation and the commitments of counsel and the court, it was not possible to hear the argument on interest and costs until November. Various points were raised both on interest and costs that commonly arise in commercial cases.
I	THE ISSUES ON INTEREST
2.	There was initially before the court a dispute between the parties as to whether interest should be paid on the basis of LIBOR +1% or on the basis of prime + 1%.  The issue was agreed between the parties immediately prior to the argument and I was asked to award, subject to the arguments on other issues, interest at the rate of prime +½%.  This left two issues to be determined.
(1)	The date from which interest should run.
(2)	Whether there should be any reduction in the period for which interest was awarded or the rate at which it should run because of the delay by the claimants in relation to the bringing and pursuit of the claim.
(1)	The date from which interest should run
3.	Although there is a considerable amount of authority on the question as to the date from which interest should run which was recently reviewed by Langley J in Kuwait Airways Corporation v Kuwait Insurance Co. [2000] LIRLR 678, the most helpful guidance is to be found in the judgment of Robert Goff J in BP Exploration Co. (Libya) Limited v Hunt (No 2) [1979] 1WLR 783.  The passage at p 846, as Mr Justice Langley rightly observed, is not only a clear statement of principle but one which has stood the test of time and reconciled the applicable principles:
 “…. interest will generally run from the date of accrual of the cause of action in respect of money then due or loss which then accrues; and in respect of loss which accrues at a date between accrual of the cause of action and judgment, from such date.  For convenience, I shall refer to these dates compendiously as the “date of loss”, although I recognise that the term is not altogether appropriate in a case of restitution…..

But the power to award interest is discretionary, and there is certainly no rule that interest will invariably run from the date of loss.  It is no part of my task to attempt to define the circumstance in which the court will depart from the fundamental principle; indeed, since the discretion to award interest is unfettered, it would be improper to do so.  There appear, however, to be three main groups of cases in which, in the exercise of its discretion, the court may depart from the fundamental principle. ”
4.	Robert Goff J then considered the three groups of cases.  Only the first is relevant to this issue.  He said:
“The first group of cases concerns the position of the defendant.  The court may consider, in the light of all the circumstances, that his position was such that it would not be just to make the defendant pay interest from the date of loss.  It may do so if, for example, the circumstances were such that the defendant neither knew, nor reasonably could have been expected to know, that the plaintiff was likely to make a claim, and so was in no position either to tender payment, or even to make provision for payment if the money should be found due.  In such a case, the court may in its discretion only grant interest from the date of the plaintiff’s claim, or even from such a date as will allow reasonable investigation of the claim.  Again, to quote from Lord Wilberforce’s speech in the Firestone case, at page 836:
“In a commercial setting, it would be proper to take account of the manner in which and the time at which persons acting honestly and reasonably would pay””

5.	Robert Goff J then concluded:
“The basic principle is, however, that interest will be awarded from the date of loss.  Furthermore, the mere fact that it is impossible for the defendant to quantify the sum due until judgment has been given will not generally preclude such an award.  Thus, in Admiralty, in collision cases where the ship is totally lost, interest has been held to run from the date of the loss (see eg The Berwickshire [1950] P.204 and Owners of Leisbosch Dredger v Owners of SS Edison [1933] A.C. 449, 468) and in the case of a salvage award, from the date of the rendering of the salvage services: see The Aldora [1975] Q.B. 748.  There must have been many cases in the commercial court in which, although the quantum of damages was in doubt until the date of the judgment, interest was awarded from the date of loss.”
6.	I therefore turn to apply these principles to the present claim. The first question is to determine when the sum became due under the policy. As a matter of technical and legal analysis, I accept an insurer is in breach in failing to pay the assured the sum due under the policy at the date of the loss. I agree with the view of Mance J in Insurance Corporation of the Channel Islands v McHugh [1997] LIRLR 94 at 137, where he said that insurance contracts are treated in law as contracts to hold the insured harmless against liability or the loss insured against; therefore insurers are in the absence of contrary provision in breach of contract as soon as the insured liability or loss occurs.
7.	 However, although the date of the loss is when the sum became due under the policy, it does not follow that the court awards interest in every case from the date of the loss.  For example in the Popi M [1984] 2 Lloyd’s Rep 555 the assured put forward a claim on a basis substantially different to that which proved successful at trial.  The trial judge (Bingham J) awarded interest from a period about 4 years and 4 months after the loss. The Court of Appeal awarded interest commencing 2 years after the date of the loss; Sir John Donaldson M.R. (with whom O’Connor LJ agreed) considered that the case was unusual and underwriters therefore needed time to make up their minds.  May LJ, though not differing from the other judges in the result, expressed the view that although in most cases insurers would need to investigate claims, prima facie interest ought to be awarded from the date of the loss.  Another example is McLean Enterprises v Ecclesiastical Insurance [1986] 2 Lloyd’s Rep 216, where interest was awarded by the trial judge (Staughton J) from a date some 5 weeks after the loss.  In Kuwait Airways Corporation (to which I have referred) the loss occurred shortly after the invasion of Kuwait by Iraq on 2 August 1990, but interest was only awarded from 5 December 1990; the judge found that it was not clear that until 12 November 1990 that a claim in respect of loss of spares was being pursued and insurers needed a little time to appreciate that fact and consider the claim.
8.	The decisions to which I have referred are but examples common in the experience of the Commercial Court in relation to insurance claims in unusual cases or those that are not straightforward. In such cases, the court usually exercises its discretion on the basis it is proper to allow insurers some time to consider the claim.  The time varies accordingly to the nature of the loss, the way the claim is presented and the circumstances that require investigation.  In many cases the time may be quite short.  The court will always have regard to the particular circumstances specific to that claim.
9.	In this particular case, the fact of the fire was known immediately to underwriters; loss adjusters were on the scene almost immediately (see paragraph 31 of the judgment).  However it was not obvious what, if any, damage La Danse Grecque had suffered.  Discussions also took place with underwriters about the terms of the policy; on 17 January 1992 the claimants’ brokers and underwriters agreed the partial loss clause (see paragraph 69 of the judgment). Furthermore at some stage prior to the trial, the parties agreed that the damaged value should be “after restoration but assessed as at immediately after the fire” (see paragraph 93 of the judgment).  As I held at paragraphs 94 and 95 of the judgment, I considered that it was not possible immediately after the fire to express a view on the extent of the damage and the risk of deterioration; that would only be possible after restoration was complete.
10.	In my view therefore, in this highly unusual case, it would be right to award interest only from a date at which restoration was complete and underwriters had had time to consider the matter.  Restoration was carried out with due diligence by early 1992.  The picture was then examined in early March 1992 by the claimants’ expert.  It seems to me reasonable to allow a period after the opinion expressed as a result of that examination for underwriters to consider that opinion.  In my judgment therefore interest should run from 31 March 1992.  I see no reason to allow underwriters beyond that time; they have had the use of the money;  a period down to 31 March 1992 gave them sufficient time to consider the claim and the value and come to a decision.

(2)	Should interest run for the entire period at the agreed rate?
11.	It was not disputed that in considering whether interest should be awarded for the entire period the court could consider the conduct of the claimants.  The principle is again expressed by Robert Goff J in BP v Hunt when he described the second group of cases which were an exception to the general rule:
“The second group of cases concerns the conduct of the plaintiff.  If, for example, the plaintiff has been guilty of unreasonable delay in prosecuting his claim, the court may decline to award interest for the full period from the date of loss.  This may be to encourage plaintiffs to prosecute their claims with diligence, and also because such conduct may lull a defendant into a false sense of security, leading him to think the claim will not be pursued against him…”
12.	The principle so experienced was applied by Colman J in The Athenian Harmony [1998] 2 Lloyd’s Rep 425.  In that case there was a delay on the part of the claimants for a period of some 4½ years after the giving of discovery which the claimants could not explain.  Colman J considered that the claimants were so substantially at fault in not progressing the claim that it was their conduct which caused their loss and their recovery of interest should be cut through a reduction in the rate of interest.  He said at p 427:
“In cases where the delay and the degree of fault are so substantial that the predominant cause of the plaintiff being out of his money can be seen to be his own failure to prosecute the claim, rather that the defendant’s maintenance of his defence, it is not difficult to see that the policy should be that a successful plaintiff should not be compensated for loss of use of the money.  However, in order for it to be said that the plaintiff’s fault has displaced the defendant’s fault as the predominant cause of the plaintiff being kept out of his money, the delay in question would have to be very substantial and not merely relatively short periods of weeks or months during which in commercial litigation lulls in activity inevitably occur and the plaintiff’s fault would have to be very substantial, as where an action has inexcusably been allowed to go to sleep for years.”
13.	In the present case, there was no explanation as to why two years had elapsed between the sale of La Danse Grecque to the client of Asya Chorley in June 1995 (see paragraphs 51–57 of the judgment) and the issue of proceedings in September 1997.  Thereafter, although the action did not proceed rapidly, it cannot be said there was any dilatory conduct on the part of the claimants; the very long period of delay between the case management conference and the date of trial occurred because of the pressure of other business in this court.
14.	Underwriters contended that there was no reason why after the sale of the pastel to the client of Asya Chorley in June 1995, the claimants had not pursued the claim; the writ was then only issued very shortly before the expiry of the six year limitation period.  The delay between June 1995 and September 1997 was, underwriters submitted, entirely the fault of the claimants; that was why the claimants had been kept out of their money.  The claimants contended, however, that as statute allowed them a period of six years within which to bring a claim, they could not be criticised for not bringing the action until the time at which proceedings were issued.  There was no case that anyone had been able to discover where a period of delay prior to the issue of proceedings had been taken into account.  Furthermore the claimants pointed to the use of the words in the passage cited by Robert Goff J “delay in prosecuting the claim” and “plaintiffs to prosecute their claims”; this choice of language was, it was submitted, a direct reference to the choice of language used in the cases dealing with the jurisdiction to dismiss cases for want of prosecution under the old rules of the Supreme Court; under that jurisdiction, no account of delay could be taken prior to the issue of proceedings.
15.	I do not find the fact that there are no reported cases of any material significance; in my experience it is extremely rare for an insured with a good claim to delay issuing proceedings.  In this case it was clear there was at least a claim to some payment by way of indemnity; the claimants were owned  by a wealthy shipowner and there was therefore no difficulty in funding proceedings. The delay in bringing the claim after June 1995 is wholly unexplained. Nor do I consider the choice of language by Robert Goff J was intended to refer to the jurisdiction in relation to want of prosecution; the use of the words “prosecuting a claim” are words that could equally well be used to describe a period before or after the issue of proceedings.  Nor do I think that it matters that statute allows a claimant a period of 6 years to bring a claim.  The question for the court is whether there has been unreasonable delay in prosecuting the claim (as it is put by Robert Goff J) or can it be said that the claimants fault in prosecuting the claim displaces the defendants’ fault in failing to pay the claim as the predominant cause of the claimant being kept out of his money (as it was put by Colman J).  It is clear that a defendant does not have to show he has suffered prejudice: see Spittle v Bunney [1998] 1 WLR 847 and Beahan v Stoneham (transcript, 21 January 2001).
16.	In the absence of any explanation for the period of delay in bringing proceedings, I consider that there was unreasonable delay; this also was the predominant cause of the claimants being kept out of their money.  There seems to be no reason why the claimants could not have issued proceedings in September 1995; the delay until September 1997 is wholly inexplicable.  I do, however, have to bear in mind that during that period interest rates were high and that therefore underwriters derived a substantial benefit. That is a significant factor – see the judgment of Waller LJ in Adcock v Cooperative Insurance Society [2000] LIRLR 657 at 662.  In the circumstances therefore it seems to me that it would not be right to deprive the claimants of the whole of the interest during the two year period from 1 September 1995 to 1 September 1997.  I will therefore award the claimants interest only at half the rate that would otherwise have been payable during that period.
II	COSTS
17.	The claimants contended that as they had succeeded in their claim, they should be entitled to the costs of the action.  However the underwriters contended that I should have regard to a number of factors which when considered would lead to the conclusion that there should be a very substantial reduction in the award for costs to the claimants.  Those submissions can be summarised under four headings:
(1)	Success by underwriters on the valued policy issue.
(2)	 A consideration of the CPR Part 36 offers.
(3)	The conduct of the claimants.
(4)	Consideration of the overall success.
18.	I will consider each in turn.
(1)	Success on the valued policy issue
19.	As appears from my judgment, the issue of construction as to whether the policy was a valued or unvalued policy was entirely separate from the factual issues I had to consider.  Although factual issues on value would in any event have to be considered, the question as to whether the policy was a valued one or not was important; if the claimants had been successful on that issue, it would have led to a significantly greater recovery.  In my view the costs are clearly quite distinct; as underwriters succeeded on that issue, I see no reason why I should not reflect that fact by awarding underwriters costs of that issue.
20.	Neither party urged me to do so in those terms as such an order would lead to the necessity for consideration of that question on assessment.  I consider that it would be better if I adjusted the overall costs recoverable by the claimants to reflect that fact.  In doing so, I bear very much in mind the fact that, although time would have been required by counsel for the preparation of their careful and economic arguments on the issue, the issue occupied only a separate ½ day and that seven full days were spent on the factual issues and other legal issues that arose.
(2)	The Part 36 offers
21.	On 5 August 1999 the claimants made a Part 36 offer of $5,725,588.10 as the sum which they would be prepared to accept.  The sum was inclusive of interest.  On 28 March 2000, the underwriters made a Part 36 payment in sterling which was the equivalent of $1m.  It was again inclusive of interest.  The underwriters made a subsequent Part 36 offer on 2 March 2001; it was in effect the same sum by way of principal and interest as had been offered in March 2000, but was expressed to include costs down to 20 July 2000 when witness statements were exchanged.  I do not think that further offer by underwriters materially affected the position; I shall therefore consider the argument primarily by reference to the claimants’ offer and the underwriters’ payment in.
22.	It is clear that the Part 36 offer and payment in took into account interest which was clearly a significant part of the inclusive sum.  To the extent therefore that it is necessary to compare the claimants’ offer and the underwriters’ payment in to the sum of $1.4m which I held to be recoverable under the policy, the Part 36 offer made by the claimants represents approximately a sum of $3.6m by way of principal and the Part 36 payment by the underwriters is approximately $600,000 by way of principal.
23.	The claimants’ contention was straightforward.  They submitted that, as they had recovered more than the Part 36 offer made by the underwriters, the fact that the underwriters had made a Part 36 payment should not affect the issue of costs nor, they submitted, should the fact that they had made a Part 36 offer. The underwriters, however, contended that I should have regard to both Part 36 offers; the Part 36 offer made by the claimants was unrealistic.  If one compared the two, the underwriters had been more realistic.
24.	CPR Part 36.20 sets out the cost consequences where the claimant fails to do better than a Part 36 offer or a Part 36 payment; the rule provides that in those circumstances the court will, unless it is unjust, order the claimant to pay the costs after the date on which the payment or offer could have been accepted.  CPR Part 36.21 provides for the cost consequences where a claimant does better than the Part 36 offer made by the claimant; it provides that the court can order interest at a higher rate and costs on an indemnity basis.  Neither circumstance applies in the present case.  Further guidance, however, is given by CPR 44PD paragraph 8.4 which provides:
“In deciding what order to make about costs the court is required to have regard to all the circumstances including any payment into court or admissible offer to settle made by a party which is drawn to the court’s attention (whether or not it is made in accordance with Part 36).  Where a claimant has made a Part 36 offer and fails to obtain a judgment which is more advantageous than that offer, that circumstance alone will not lead to a reduction in the costs awarded to the claimant under this rule.”
25.	In considering the provisions of Part 36 and of Part 44, there are three main authorities that are of assistance.  In Petrotrade Inc v Texaco Limited (Court of Appeal transcript 3 May 2000) Lord Woolf MR made clear that Part 36 was one of the cornerstones of the reforms of procedure made by the CPR; he then set out the reasons why the provisions of CPR Part 36.21 did not have penal consequences and explained ( at paragraph 63) that “part of the culture of the CPR is to encourage parties to avoid proceedings unless it is unreasonable of them to do otherwise”; that the general message of Part 36.21 was that the court would usually order a higher rate of interest than the going rate.  In Johnsey Estates (1990) Ltd v Secretary of State for the Environment [2001] EWCA Civ 535, the claimants had (using the vernacular used in the judgment) “beaten” the first of two payments in, but not the second.  They contended therefore they should have all the costs from that date until the date of a second payment in.  The defendant contended that the claimants should be deprived of all their costs between the date of the first and second payment in, as the claimants were seeking damages in amounts which were far in excess of the amount to which they were ultimately held entitled; that it was the claimants’ inflated and unrealistic valuation of their claims which had made it impossible to dispose of the action by agreement; the action had gone on because the claimants were not interested in any reasonable offer and in those circumstances the claimants should bear its own costs.  The conclusion of Chadwick LJ giving the leading judgment was: 
“32.	The submission has some superficial attraction on the facts of the present case; but, for my part, I would reject it.  It seems to me that a court should resist invitations to speculate whether offers to settle litigation which were not in fact made might or might not have been accepted if they had been made.  There are, I think, at least two reasons why a court should not allow itself to be led down that road.  First, the rules of court provide the means by which a party who thinks that his opponent is not open to reason can protect himself from costs.  He can make a payment in; he can make a Calderbank offer; now, under the Civil Procedure Rules 1998, he can make a payment or an offer under CPR pt 36.  The advantage of the courses open under the rules is that they remove speculation.  The court can see what offer was made, when it was made, and whether it was accepted.  Second, speculation is likely to be a most unsatisfactory tool by which to determine questions of costs at the end of a trial.  It is not, I think, suggested that each party would be required to disclose, at that stage, what advice it had received, from time to time, as to the strengths and weaknesses of its claim or defence.  but without knowing that – and without a detailed knowledge of the financial and other pressures to which each party was subject from time to time – speculation would be hopelessly ill-informed.  If Mr Gaunt’s submission were to be accepted generally, there would, I think, be a serious danger that, at the end of each trial, the court (in order to decide what order for costs it should make) would be led into another, potentially lengthy, inquiry on incomplete material into “what would have happened if …?”  I am not persuaded that that could be compatible with the overriding objective to deal with cases justly.”
26.	In Firle Investments v Datapoint International Limited [2001] EWCA Civ 1106, the claimant recovered £53,965.25 by way of damages, a sum £3,500 in excess of the combined Part 36 payments.  The claimant had himself made a Part 36 offer of £135,000.  The judge awarded the claimant only a proportion of its costs.  In giving the leading judgment, Schiemann LJ, after referring to Johnsey Estates and another decision of the Court of Appeal (Amber v Stacey), said:
“4.	From those cases it is clear that it is manifestly desirable that the outcome of litigation, including the outcome as to costs, should be reasonably predictable.  Yet the facts of cases vary infinitely and the rule maker cannot make provision for every eventuality.  The rules therefore leave the judge a measure of discretion in an attempt to produce justice in line with principle; and so as long as the judge acts in accordance with principle, this court, which lacks the advantage of having seen the case develop, will not interfere with the decision of the judge.  Another way of putting it is to say the court will not interfere unless the judge is plainly wrong.
…
10.	But Simon Brown LJ draws attention in paragraph 40 [in Amber v Stacey] to a possibly important consideration, that a party may be able to establish that it was their opponent’s unreasonable conduct which prevented them making a properly informed decision about their prospects in the litigation and thus avoid what would be the usual costs order.  That is an important consideration to bear in mind because manifestly the court is concerned that each party should be able to assess its case realistically with a view to being able to make a sensible offer; and it is a fair point to make that in the present case the parties were a long way apart.  In many ways the judge came down much closer to the defendant’s side than to the claimant’s side and it is a fair point to make that the claimant indicated that it really was not interested in talking at the level at which the defendant was talking; but nonetheless the end position was that the claimant beat both payments in.”
27.	The court held that the claimant ought to get its costs up to the first payment in, as it succeeded by a substantial amount what had been paid in.  As to the costs after the first payment in, the Court of Appeal made a 30% reduction in the costs, on the basis the claimants had persisted in asserting various matters which they should not have persisted in asserting.
28.	Applying the principles set out in the CPR and in the judgments of the Court of Appeal to which I have referred, it seems to me that the important factor in this case is that the principal sum of $1.4m held by me to be due under the policy considerably exceeded the amount of the underwriters’ Part 36 payment of principal of $600,000; even allowing for the deduction which I have made in respect of part of the period of interest, the sum recovered was significantly in excess.  It was urged upon me by underwriters that I should regard the Part 36 offer made by the claimants as evidencing an unreasonable attitude.  However in considering that, it is also necessary to have regard to the payment in under Part 36 made by the underwriters.  In a letter written on 3 April 2000 shortly after the payment in the underwriters’ solicitors stated:
“We look forward to hearing whether or not the payment is accepted.  We can assure you it is “fighting” payment in, it will not be improved upon and if not accepted the matter will proceed to trial.”
29.	It was urged upon me by the claimants that this evinced a clear attitude on behalf of the underwriters not to improve their offer; that they were therefore being unreasonable.  It seems to me implicit in any Part 36 payment that a party must be taking the position that, at any rate at that stage, it is their final Part 36 payment.  Thus what was stated expressly on behalf of underwriters in the letter to which I have referred is no more than would be implicit.  It is, however, open to each party to negotiate.  But is it for the court then to assess, after the Part 36 offers have been made, whether the parties should have negotiated and, if so, which party was unreasonable in not doing so?  It seems to me to follow from the judgment of Chadwick LJ in Johnsey Estates that the court should not in a case such as the present examine the question of the reasonableness of the payment in or whether one or the other party should have negotiated.  Answering such a question would lead to the need for an extensive enquiry at the end of any case and would create uncertainty.  A payment under Part 36 or a Part 36 offer should be regarded as the best to which a party is prepared to go; if the defendant goes no further, and the claimant recovers more, that should in the usual case be an end of it.
30.	Nor can I see that the size of the Part 36 offer made by the claimant usually should affect the question.  If a court were to hold that a Part 36 offer by a claimant which was too high could lead to a reduction in costs recoverable at the end of the day, there would be a strong discouragement to making Part 36 offers.  CPR PD44.8 supports the view that a reduction should not be made.
31.	I therefore have come to the view that I should not have regard to a comparison between the sum recovered and the Part 36 offer and payment made in this case.  The claimants had to come to court to better the Part 36 payment made by the underwriters; they succeeded in obtaining a sum substantially in excess of that. They should therefore not be disentitled to their costs by reason of comparison with their Part 36 offer.
32.	Even if I had taken a contrary view, on the facts of this particular case, a comparison between the Part 36 payment by the underwriters and the offer by the claimants by reference to the principal sums implicit in the payment and the offer shows that both parties were very far away from the sum I decided was recoverable.  Thus on the facts of this particular case, even if I were to have thought it proper in all the circumstances to make a comparison, it would not have affected my decision.
(3)	The conduct of the claimants
33.	It was common ground that under CPR Part 44.3(4) and (5) I am entitled to take into account the conduct of the parties when making an order as to costs.
34.	Three principal complaints were made by underwriters about the claimants’ conduct of the action:
(a)	The claimant’s initial failure to be frank about what was happening in their attempt to market La Danse Grecque before the fire.
(b)	The failure to give proper discovery in relation to the receiver’s documents.
(c)	The claimants’ refusal to call Mr Uppstrøm until the trial had commenced.
I will deal with each in turn.
35.	Although it was very important to hear the evidence of the experts on valuation, the actual attempts to market La Danse Grecque were of great importance.  They were relevant not only to obtaining a contemporaneous view about the offers made for the pastel, but they were important in assessing the effect that such marketing had on the value of the pastel and hence the opinion of the independent expert (see paragraph 132 of the judgment).  Thus the evidence given in relation to the attempts to market and other dealings with La Danse Grecque was significant.
36.	It was clear that to the extent there were documents in the receivers’ files about dealings in and attempts to market La Danse Grecque those should have been disclosed promptly; it transpired just before the trial that the receivers’ files  contained important materials in relation to such dealings and attempts to market.  
37.	It was also, in my view, clear that Mr Uppstrøm was an important witness.  His statement was served on 26 April 2001.  On 3 May 2001 the underwriters made it clear that they wished Mr Uppstrøm to attend to give evidence.  On 10 May 2001 the underwriters’ solicitors made it clear that they were happy to take Mr Uppstrøm’s evidence by video link from Norway; it had already been agreed that Miss Ganz should give evidence by video link from California.  On 18 May 2001 the claimants’ solicitors made it clear that they did not want to call Mr Uppstrøm to give evidence.  Correspondence followed in which it was made quite clear by the underwriters that they wished him to come.  The principal matter which they emphasised was his evidence in relation to the sale to the client of Asya Chorley in which Tonilock had been involved.  It was only after the trial commenced that the claimants agreed that he would attend.  Though it transpired that the specific matters in respect of Tonilock were not, after cross examination, material to the issues in the case, Mr Uppstrøm’s evidence was important in relation to dealings in and attempts to market La Danse Grecque prior to the fire; and his oral evidence did affect the outcome of the case (see for example paragraph 131 of the judgment).  So did the documents produced by the receiver.  In my judgment the claimants ought to have provided Mr Uppstrøm earlier and made the documents available earlier.  I therefore have come to the view that their conduct in this respect is a matter which I should reflect in the order as to costs.
(4)	Who succeeded?
38.	The underwriters contended that I should look at the matter overall and ask who had succeeded by reference to the size of the claim advanced in the points of claim. They pointed to the fact that the claimants wanted $4m and interest and what they had got was $1.4m and interest. 
39.	Under CPR Part 44.3(5) one of the aspects of the conduct of the parties that a court can consider is “whether a claimant who has succeeded in his claim, in whole or in part, exaggerated his claim”.  Although clearly the fact that exaggeration is one of the factors specifically mentioned, the phrase “the conduct of the parties includes” means that the sub-rule is not an exclusive description of the type of conduct which I can take into account.  Nonetheless, it points to the type of conduct with which I should be concerned. 
40.	On the facts of the case, I am quite satisfied that the claimants did not exaggerate the claim; they had taken the opinion of a distinguished expert.  It is clear that valuation of a work of art of this kind is extremely difficult.  I do not think it right to say that a claimant who acted in reliance upon the evidence of a distinguished expert who had proper grounds for advancing his view, can be said to have exaggerated the claim.  Nor, it seems to me, can it be said that the claim was one that was unreasonable or too large.  It was put forward in good faith and there were reasonable grounds for advancing it.  Furthermore that reliance on the expert evidence of value did not in any way affect the length of the trial.  It would have been necessary to review the evidence of the contemporaneous attempts to market La Danse Grecque, the history of the dealings in it and to hear the two distinguished experts, Mr Dauberville and Mr Roundell.  This is not a case therefore where size of the claim put forward has affected the length of the trial; nor can it be said that the claim was exaggerated or unreasonable. 
41.	The important fact remains that the claimants had to come to court to recover the sum to which I held they were entitled.  They were therefore in that sense successful.  I do not think therefore that I should reduce the ordinary entitlement to costs on the basis that they had not succeeded.
Conclusion on costs
42.	I therefore consider that I should make some allowance against the costs otherwise recoverable by the claimants by reason only of two factors – the fact that the underwriters succeeded on a wholly severable issue and the view I have taken of the claimants conduct and in particular its effect on the course of the trial.  This is not a case where underwriters suggested I should make no order as to costs; they submitted that I should reduce the percentage of recoverability; in the circumstances they suggested that I should order that the claimant recover no more than 50% of their costs.
43.	Bearing in mind the length of time taken on the issue on which underwriters succeeded and the fact that this would have involved little by way of pre-trial costs and taking into account, as best I can judge, the increase in both the costs of preparation and the time of the trial by the conduct of the claimants to which I have referred, it seems to me that both of these factors would properly be reflected by allowing the claimants to recover only 80% of the costs of the action.