England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EMPLOYMENT APPEAL TRIBUNAL
Mr Justice Elias (President), Mr B Beynon and Sir Alastair Graham
UKEAT/0123/08/LA
ON APPEAL FROM THE READING EMPLOYMENT TRIBUNAL

		Royal Courts of Justice Strand, London, WC2A 2LL
		15 October 2009

Lord Justice Lloyd:

Introduction

1. This judgment sets out my reasons for having dismissed an application which, as issued, sought an order that "the respondent is not permitted to recover its costs of this appeal from the appellant", which would be a protective costs order (PCO). The application notice was issued on 11 March 2009.
2. The Employment Tribunal at Reading dismissed the appellant's claim that the respondent unlawfully discriminated against her in respect of her religious belief. The Employment Appeal Tribunal dismissed her appeal. The present appeal is against that dismissal. The appellant issued her ET1 claim form on 15 December 2006. The ET issued its judgment to the parties on 7 January 2008, and the EAT gave its judgment on 20 November 2008. The Appellant's Notice to this court was issued on 10 December 2008, and permission to appeal was given by Sedley LJ on 28 January 2009.
3. In the ET and the EAT the appellant was not, in practice, at risk of having to pay the respondent's costs, and she had the advantage of legal representatives who acted for her gratuitously. In this court she does face a real risk of liability to the respondent for costs if her appeal is not successful. She cannot cope with that risk herself, her assets being enough to disentitle her from public funding (and the protection that follows from that) but not adequate to cover the respondent's costs if she were not successful on the appeal. Hence the application with which we are concerned. Her present legal representatives act under a CFA.
4. The appellant sought assistance from a number of persons or bodies, including the Equality and Human Rights Commission. The Commission was unwilling to assist her, even after permission to appeal had been granted.
5. Sedley LJ considered her application for a PCO on paper, and refused it, on 27 April 2009. Later (on 8 May) she put forward a different proposition, namely that the order should limit the amount for which she should be at risk in respect of the respondent's costs to £20,000; an indemnifier had been found who (or which) was willing to cover that liability up to that amount. She did not issue a fresh application notice, though it was described as a revised application. Sedley LJ was prepared to entertain it without any further formality, and to consider it on the papers, with the benefit of submissions from the respondent, including a draft bill of costs. On 21 May he ordered that the respondent's costs recoverable from the appellant be capped at £25,000, including disbursements and VAT. The appellant's indemnifier is said to be willing to cover that amount. The respondent exercised its right to have the application considered at an oral hearing; this judgment is given following that hearing.
6. Two different powers of the court have to be considered. One is a power to protect a party (almost always a claimant) against liability for the other party's costs: a PCO. The other is a power to make an order imposing a cap on the amount which one party can recover from the other in respect of future costs, known as a costs-capping order (CCO). The basis of the two powers is quite distinct, even though the effect may in some cases be similar, in that a PCO may not always exclude all liability for the other side's costs; it may limit liability to a stated amount.
7. A PCO is available in public law litigation, where the claimant has no (or virtually no) private interest in the matter at issue, and where a liability for the other side's costs would be likely, in effect, to prevent the claimant from bringing, or continuing, the proceedings at all, and thereby prevent a matter of public interest and importance being considered by the court.
8. A CCO is made on the basis that the litigant is at risk as to the other side's costs, in the ordinary way, but seeks to prevent that liability from being inflated by the incurring of disproportionate amounts in respect of costs. Since 6 April 2009 such orders have been regulated by the rules: CPR 44.18-20.

The appellant's claim

9. In the ET the appellant, who worked for the respondent on its check-in desks, complained of having not been allowed to wear a cross, denoting her Christian faith, in such a way as to be visible outside her uniform. On 20 September 2006 she was told that, because of the respondent's then uniform policy, she must not wear such a cross in a manner which was visible; she refused to conceal the cross and went home. She returned to work on 3 February 2007, the respondent having in the meantime reviewed its uniform policy and adopted a changed policy, with effect from 1 February 2007, under which she was allowed to wear a cross in a visible manner. She had by then already issued her claim in the ET. During the period of her absence from work she was not paid by the respondent, though she was able to earn money from some other sources.
10. In the ET1 she alleged direct and indirect discrimination on grounds of religion, and harassment. She claimed, in effect, for her pay withheld during her absence from work which, it was common ground, she was entitled to (subject to set-off of sums earned elsewhere) if she succeeded on discrimination but not otherwise. The hearing lasted 6 days in November 2007, with 15 witnesses being called. In its reasons for decision, extending over 44 pages, the ET rejected all aspects of her claim, though it also said that it would not have held the respondent's policy to be justified if there had been discrimination.
11. Although the appellant did not adduce evidence at the ET on remedy, she had identified her claims in an agreed list of issues for the Tribunal as being for loss of earnings (£3,906), injury to feelings, in the band £15,000 to £25,000, aggravated damages of £50,000 and a 50% uplift in the award under section 32(3) of the Employment Act 2002, together with a declaration as to discrimination, and recommendations as to the respondent's conduct including making a full apology to her. In October 2007 the respondent made an open offer to her to pay her £8,500 and to pay £50,000 to UNICEF in order to settle the claim. She rejected that offer.
12. The appellant appealed to the EAT only against the finding as regards indirect discrimination. The EAT dismissed her appeal, though on somewhat different grounds, attributable (according to the submissions of Ms Simler Q.C. for the respondent, though this is disputed by Ms Monaghan Q.C. for the appellant) to a change in the way her case was presented. In the ET the case was dealt with on the footing that the appellant's case was that the uniform policy created a barrier for her which prevented her from working for the respondent under her employment contract. Her claim failed because there was no evidence that the rule operated as a barrier for Christians generally, or for anyone other than the appellant herself. The Tribunal said at paragraph 33.5: "there was no evidence of Christians failing to apply for employment, being denied employment if they applied for it, or failing to progress within the employment of the respondent". It followed that the provision did not put Christians at a particular disadvantage. They said that it followed that the claimant was not put to a disadvantage. As the EAT said at paragraph 16 that must be understood as meaning that she did not suffer a relevant disadvantage, which had to be one suffered by her as a member of a group.
13. In the EAT the case was argued on the basis that there did not have to be a barrier, because a particular disadvantage could be suffered by an employee as a result of the imposition of the policy, even if the employee was prepared to comply with it, and that on that basis the Tribunal should have concluded that there were others who shared the appellant's views. The EAT held that the appellant had to show that relevant disparate impact was suffered by others sharing the same religion or belief. For the appellant it was argued that it should be sufficient if one other person besides the appellant felt the same as the appellant, and that it must be supposed that there would be at least one other person who did hold the same views and who would be placed at a similar disadvantage as the appellant if that person were to be employed by the respondent in circumstances in which the uniform policy applied to him or her. The EAT described this as raising a fundamental issue concerning the scope of indirect discrimination (paragraph 50). The EAT rejected the argument.
14. I do not need to go further into the substance of the point on the appeal to this court. The EAT's comment on its importance, which I have just mentioned, together with Sedley LJ's observation, when granting permission to appeal, that the issue was of general importance, is sufficient for the purposes of the issues arising on the costs application.

Protective costs orders - the principles

15. The principles relevant to the grant of a PCO were reviewed extensively by the Court of Appeal in R (Corner House Research) v Secretary of State for Trade and Industry [2005] EWCA Civ 192. The court drew a distinction between public law litigation on the one hand, to which these principles were said to be relevant, and private law civil and family litigation on the other hand (see paragraphs 28 and 69). They stated the conditions for the grant of such an order as follows at paragraph 74, as follows:

"We would therefore restate the governing principles in these terms:

1. A protective costs order may be made at any stage of the proceedings, on such conditions as the court thinks fit, provided that the court is satisfied that:

i) The issues raised are of general public importance;

ii) The public interest requires that those issues should be resolved;

iii) The applicant has no private interest in the outcome of the case;

iv) Having regard to the financial resources of the applicant and the respondent(s) and to the amount of costs that are likely to be involved it is fair and just to make the order;

v) If the order is not made the applicant will probably discontinue the proceedings and will be acting reasonably in so doing.

2. If those acting for the applicant are doing so pro bono this will be likely to enhance the merits of the application for a PCO.

3. It is for the court, in its discretion, to decide whether it is fair and just to make the order in the light of the considerations set out above."

16. The third of the five conditions has been the subject of discussion in several cases since then, and Ms Monaghan submitted that it should be applied flexibly. The latest word on this subject, albeit obiter, is in Morgan v Hinton Organics (Wessex) Ltd [2009] EWCA Civ 107. That case reviewed intervening decisions including Goodson v HM Coroner for Bedfordshire and Luton [2005] EWCA Civ 1172, R (Bullmore) v West Hertfordshire NHS Trust [2007] EWHC 1350 (Admin) (Lloyd Jones J), R (Compton) v Wiltshire Primary Care Trust [2008] EWCA Civ 749, and R (Buglife) v Thurrock Gateway Development Corp and another [2008] EWCA Civ 1209.
17. In Goodson the court applied the private interest requirement strictly and therefore refused a PCO. The applicant sought judicial review of the coroner's decision not to conduct a full inquiry into the circumstances of her father's death in hospital. It was held that her personal interest, albeit not a financial one, was sufficient to rule out a PCO. It had been argued that it should be sufficient if the "public interest in having the case decided transcends … or wholly outweighs the interest of the particular litigant." The court disagreed, noting that such alternative formulations had been considered in Corner House itself, but nonetheless the guideline had been expressed "in unqualified terms".
18. In Bullmore the judge said that he thought that a private interest should not be a disqualifying factor but "its weight or importance in the overall context" should be treated as "a flexible element" in the judge's consideration. Compton was not directly concerned with the private interest requirement, but in discussing the definition of a "public interest case", Waller LJ referred to the need to avoid an "over-restrictive" approach to the Corner House guidelines, and said that he also found "support for a non-rigorous approach" in the judge's observations in Bullmore. Buglife was also not concerned with the private interest requirement, but before generally endorsing Waller LJ's approach to the Corner House guidelines, the Master of the Rolls specifically referred to his approval of "the flexible approach of Lloyd Jones J in Bullmore".
19. In Morgan v Hinton the court said this at paragraph 39:

"39. On a strict view, it could be said, Goodson remains binding authority in this court as to the application of the private interest requirement. It has not been expressly overruled in this court. However, it is impossible in our view to ignore the criticisms of this narrow approach referred to above, and their implicit endorsement by this court in the last two cases [Compton and Buglife]. Although they were directly concerned with other aspects of the Corner House guidelines, the "flexible" approach which they approved seems to us intended to be of general application. Their specific adoption of Lloyd Jones J's treatment of the private interest element makes it impossible in our view to regard that element of the guidelines as an exception to their general approach."

20. Having then noted that the Rules Committee had not yet been able to deal with the point, the court went on at paragraph 40 to say:

"In the meantime, in our view, the "flexible" basis proposed by Waller LJ, and approved in Buglife should be applied to all aspects of the Corner House guidelines."

21. Thus, in the only case in this court since Corner House in which the point has been critical, the private interest requirement, as stated in Corner House, has been applied strictly, but in several other cases since then, in none of which has the point arisen for decision, the court has shown a distaste for that strict approach.
22. The other aspect of Corner House that requires attention is that it is confined to public law litigation. That arose from the Court of Appeal's review of the cases, and in particular from the case of McDonald v Horn [1995] ICR 685. In that case Hoffmann LJ referred to the then applicable rule, which established a presumption in favour of costs following the event, but with a discretion to make some other order according to the circumstances of the case. He said:

"This rule reflects a basic rule of English civil procedure, namely that, as Lord Halsbury LC said in Civil Service Co-operative Society v. General Steam Navigation Co [1903] 2 KB 756, a successful litigant has a prima facie right to his costs. In cases like Ritter v Godfrey [1920] 2 KB 47 the Court of Appeal has laid down more detailed principles limiting the circumstances in which a successful party can be deprived of his costs or ordered to pay the costs of the other party. Order 62, rule 3(3) is a formidable obstacle to any pre-emptive costs order as between adverse parties in ordinary litigation. It is difficult to imagine a case falling within the general principle in which it would be possible for a court properly to exercise its discretion in advance of the substantive decision. So in Wallersteiner v Moir (No 2) [1975] QB 373, 403 Buckley LJ rejected an application for an order protecting the plaintiff, Mr Moir, from being ordered to pay the costs of the defendant, Dr Wallersteiner, irrespective of the outcome of the case:

'I have never known a court to make any order as to costs fettering a later exercise of the court's discretion in respect of costs to be incurred after the date of the order. I cannot think of any circumstances in which such an order would be justified.'"

23. In Corner House the Court of Appeal drew a distinction between private law cases, governed by these principles, and public law litigation, where a more flexible approach was legitimate. At paragraph 24 the court said:

"The present appeal is concerned not with the incidence of costs in private law civil or family litigation or with statutory (or other) appeals, but with the incidence of costs in a judicial review application at first instance. Over the last 20 years there has been a growing feeling in some quarters, both in this country and in common law countries abroad which have adopted the "costs follow the event" regime, that access to justice is sometimes unjustly impeded if there is slavish adherence to the normal private law costs regime described by Buckley LJ in Wallersteiner v Moir (No 2) and by Hoffmann LJ in McDonald v Horn."

24. Having reviewed a number of cases, in this jurisdiction and abroad, the court said at paragraph 69: "We are satisfied that there are features of public law litigation which distinguish it from private law civil and family litigation." They went on to set out the principles as I have quoted them at paragraph 74 of their judgment, and to give guidance as to the procedure and the form of order that might be appropriate, before dealing with the facts of the particular case. They made a PCO under which the claimant was to be at no risk as to the respondent's costs.
25. In Wilkinson v Kitzinger [2006] EWHC 835 (Fam) the President of the Family Division made an order limiting the petitioner's liability for a respondent's costs (if successful) in litigation which took the form of private family proceedings, but which raised an issue of public law, namely whether English law would recognise as married two persons of the same gender who were lawfully married under the law of a foreign State, rather than merely recognising them as having the same status as that of a civil partnership. For statutory reasons the proceedings had to be brought for a declaration in the Family Division rather than for judicial review in the Administrative Court. The respondents to the proceedings were the other party to the marriage, the Attorney-General and the Lord Chancellor, whose department was responsible within government for the relevant legislation, and was therefore involved because of a claim for a declaration of incompatibility. The President referred to the fact that Corner House was limited to public law litigation. At paragraph 30 he said this:

"Nonetheless, the parties before me are agreed that the nature of the instant proceedings is essentially "quasi-public", in the sense that they go to matters of status, they are essentially directed to the elucidation of public law and they involve proceedings which might appropriately be brought in the Administrative Court but for the statutory provision contained in section 55 of the 1986 Act; the parties have therefore been in broad agreement that I should approach the application before me on the basis of the principles set out in the Corner House case."

26. He considered the Corner House principles and said that he would be prepared to apply the private interest condition in a flexible manner. At paragraph 54 he said:

"As to (1)(iii), I find the requirement that the applicant should have "no private interest in the outcome" a somewhat elusive concept to apply in any case in which the applicant, either in private or public law proceedings is pursuing a personal remedy, albeit his or her purpose is essentially representative of a number of persons with a similar interest. In such a case, it is difficult to see why, if a PCO is otherwise appropriate, the existence of the applicant's private or personal interest should disqualify him or her from the benefit of such an order. I consider that, the nature and extent of the "private interest" and its weight or importance in the overall context should be treated as a flexible element in the court's consideration of the question whether it is fair and just to make the order. Were I to be persuaded that the remaining criteria are satisfied, I would not regard requirement 1(iii) as fatal to this application."

27. He held that the criteria overall were not met. Although he accepted that the case was arguable, he held that the second criterion was not satisfied (paragraph 56) and nor were the fourth and fifth (paragraph 57). He said at paragraph 55:

"However, taking the remaining criteria into account, I do not consider that this is a case where it is appropriate to make the PCO sought, although, for reasons I shall state later, I do consider it appropriate to impose a limit upon the amount the Lord Chancellor's costs."

28. He capped the amount for which the claimant was to be at risk at £25,000. He did regard the Corner House principles as potentially applicable to the litigation before him, but, given what he said about the principles in their application to the case in question, he cannot be taken to have made his order on the basis of the Corner House jurisdiction. It seems to me that it must be regarded as a costs-capping order, rather than a PCO. Ms Monaghan is entitled to rely on the discussion of the potential application of Corner House to proceedings which were, in form, private law family proceedings, but the order made was not, in my judgment, based on those principles. It was not a PCO as such.
29. So far as I am aware there is no other example of private litigation in which the Corner House principles have been considered for possible application, let alone applied. Morgan v Hinton was private law litigation (a claim for an injunction based on nuisance) but the issue did not concern a PCO, and no such order had been applied for (except upon the hearing of the appeal which was far too late, even if it had otherwise been well-founded).

Costs-capping orders

30. Costs-capping orders have been made in some instances of group litigation, such as AB and others v Leeds Teaching Hospitals NHS Trust [2003] EWHC 1034 (QB), and in at least one other case, Sheppard v Essex Strategic Health Authority [2005] EWHC 1518 (QB), where there were two claimants (twins). In Smart v East Cheshire NHS Trust [2003] EWHC 2806 (QB) Gage J refused to make such an order in a clinical negligence case brought by a single claimant in which, by then, only quantum was at stake. In King v Telegraph Group Ltd [2004] EWCA Civ 613, a defamation case where the claimant was represented under a CFA and had no ATE or other cover to provide for payment of the defendant's costs if he lost, the Court of Appeal recognised the possibility of making a costs-capping order to protect the defendant in a defamation case, though it did not make such an order. In Knight v Beyond Properties Pty Ltd [2006] EWHC 1242 (Ch) Mann J refused to make such an order in an intellectual property case where the claimant had a CFA but no ATE policy.
31. Since 6 April 2009, the court's power to make costs-capping orders has been governed by the rules: CPR rules 44.18 to 20. Rule 44.18 is as follows:

"(1) A costs capping order is an order limiting the amount of future costs (including disbursements) which a party may recover pursuant to an order for costs subsequently made.

(2) In this rule, 'future costs' means costs incurred in respect of work done after the date of the costs capping order but excluding the amount of any additional liability.

(3) This rule does not apply to protective costs orders.

(4) A costs capping order may be in respect of –

(a) the whole litigation; or

(b) any issues which are ordered to be tried separately.

(5) The court may at any stage of proceedings make a costs capping order against all or any of the parties, if –

(a) it is in the interests of justice to do so;

(b) there is a substantial risk that without such an order costs will be disproportionately incurred; and

(c) it is not satisfied that the risk in sub-paragraph (b) can be adequately controlled by –

(i) case management directions or orders made under Part 3; and

(ii) detailed assessment of costs.

(6) In considering whether to exercise its discretion under this rule, the court will consider all the circumstances of the case, including –

(a) whether there is a substantial imbalance between the financial position of the parties;

(b) whether the costs of determining the amount of the cap are likely to be proportionate to the overall costs of the litigation;

(c) the stage which the proceedings have reached; and

(d) the costs which have been incurred to date and the future costs.

(7) A costs capping order, once made, will limit the costs recoverable by the party subject to the order unless a party successfully applies to vary the order. No such variation will be made unless –

(a) there has been a material and substantial change of circumstances since the date when the order was made; or

(b) there is some other compelling reason why a variation should be made."

32. Rule 44.19 deals with the procedure for applying for such an order, and rule 44.20 with varying such an order.
33. Thus, the rule distinguishes between costs-capping orders and PCOs, and does not apply to the latter: rule 44.18(3). A costs-capping order applies only to future costs, and does not apply to an additional liability, that is to say the uplift under a CFA: rule 44.18(2). A CCO can be made at any stage of the proceedings, but only if the three conditions set out in rule 44.18(5) are all satisfied. In particular, it is not sufficient that there should be a risk that, without a CCO, costs will be disproportionately incurred. The court has to consider whether that risk can be adequately controlled by case management directions or orders, or by the detailed assessment of costs. Of course, the detailed assessment of costs, after the event, may not prevent disproportionate costs being incurred, but it can prevent the paying party having to pay disproportionate amounts.
34. In Peacock v MGN Ltd [2009] EWHC 769 (QB) Eady J had to consider this rule almost as soon as it had been brought into force, in a defamation action. He was satisfied that there was a real risk of costs being disproportionately incurred, by reference to the hourly rates proposed to be charged, and a proposal to retain leading counsel for the claimant. Left to himself he would have been inclined to make a CCO (paragraph 22), but he was satisfied that the risk of disproportionality could be adequately controlled by a costs judge at the stage of detailed assessment. He therefore refused to make a CCO. He noted that, in adopting this approach, the rules followed the line taken by Gage J in Smart and in turn by Mann J in Knight, rather than that advocated by Brooke LJ in King. Since then a pilot scheme has been undertaken for the control and management of costs in defamation claims: see Practice Direction 51D.
35. As I have mentioned, it seems to me that the order made by Sir Mark Potter, President, in Wilkinson v Kitzinger should be understood as being a CCO. But he did not have detailed submissions on the relevant cases, and of course his decision was before the new rules.

Sedley LJ's orders

36. Sedley LJ first refused to make an order as sought by the appellant on 24 April 2009. He referred to Corner House, and said that although the legal issues were of general importance, the appellant's conduct of the proceedings did not seem entirely public-spirited. He noted that she had achieved what she sought in practice, as regards the uniform policy, and had rejected an offer of compensation for herself and of a payment to charity. He also said that it was hard to see what more the respondent could have done in practice to meet the grievance.
37. His reasons given on the second occasion, on 21 May 2009, were headed "Decision on appellant's application for a costs capping order". His reasoning was directed entirely at what appeared to him to be the excessive size of the costs forecast by the respondent to be incurred, as set out in a draft bill which he had required to be produced. He had not been referred to rule 44.18. Liberty, by then acting for the appellant, referred in support of their revised application to factors more relevant to a PCO, such as the general public importance of the issue. Baker & McKenzie, responding on behalf of the respondent, likewise treated the application as being made under the Corner House principles. It seems to me that Sedley LJ did not make his eventual order in favour of the appellant on a PCO basis, but rather as a CCO. It is unfortunate that he did not have the benefit of citation of the relevant rule.

Discussion

38. In my judgment, the court cannot make a PCO in this case. This is not public law litigation, but a private claim by a single employee against her employer. A PCO cannot be made in private litigation. I do not regard Wilkinson v Kitzinger as a true exception to this principle, even though the President considered the Corner House conditions. It was close to public law litigation, and could have been brought by way of judicial review but for a particular statutory provision. Moreover, the President's order was not made as a PCO, but as a CCO: see paragraph [28] above. The particular issue in the present appeal may not be usual, but the nature of the claim is commonplace. The issue may be of general importance, but the claim is a private claim, for the benefit of the employee.
39. Even if the court could make a PCO in this case, notwithstanding that it is not public law litigation, I consider that it should not do so. On this I share the view of Sedley LJ in his first ruling. Even if the private interest condition can be applied with some flexibility, the appellant's private interest is too significant to make it appropriate to treat the case as within the Corner House principles.
40. So far as a CCO is concerned, the difficulty which the appellant faces is the same as the defendant faced in Peacock v MGN: even if disproportionate costs would be incurred by the respondent, why should one not suppose that a costs judge can control the risk that the appellant, if unsuccessful, would have to pay disproportionate amounts by way of costs?
41. Ms Monaghan presented her case as being based alternatively either on Corner House or by analogy with King v Telegraph Group. The latter aspect of her case was based on the proposition that the respondent's draft bill of costs was excessive, and that the costs which it had incurred at the previous stages, said to have been £289,000, were vastly excessive. As to the latter, on the one hand there was no risk of the appellant having to pay any of those costs, so that the question did not arise of considering their proportionality as between the parties, and secondly the case did attract very substantial publicity, so that it was natural and understandable that the respondent should devote substantial resources to the case. I do not regard that expenditure as relevant to the questions which arise as regards the costs of the appeal.
42. The respondent's draft bill of costs, supplied on 19 May 2009, showed costs of some £21,700 at the PCO stage, and £36,800 for the appeal itself. Those were put forward as the solicitors' bill to their client, including disbursements (principally Counsel's fees). Though Sedley LJ was not to know it, and nor was the full court at the time we announced our decision, when it came to submissions about costs, Ms Simler sought only an order that the appellant pay to the respondent £3,500 towards its costs of the costs application, influenced in this by observations of the court in Corner House (paragraphs 78-79). So in that respect the draft bill was not a helpful guide to the amount for which the appellant was in fact at risk.
43. Sedley LJ said, in his second ruling, that the draft bill included solicitors' fees at rates which exceed by over 25% the current guideline rates on costs assessment, that the projected hours of work seemed on the generous side and that Counsel's fees appeared to be considerably higher than would be allowed on an assessment as between the parties by the court or a costs judge. In each of these respects, he considered that it would be unreasonable to expect an unsuccessful appellant to pay the amounts which the respondent incurred for a "Rolls Royce service". On the basis of those comments, he said that he did not consider that the imponderables were such as to make it unjust to cap the respondent's costs at this stage, and he accepted that a litigant in the appellant's position ought so far as fairly possible to be able to make reliable provision for her contingent liability.
44. It seems to me that the rules as they stand do not permit the making of an order in this case, notwithstanding Sedley LJ's comments. His points about the respondent obtaining, and paying for, a Rolls Royce service, and that the appellant should not be expected to pay for that level of service, are no doubt entirely apposite. However, as he indicated, the sanction, and the protection for the paying party, lies in the power of the costs judge to assess the costs at a reasonable level and to disallow excessive expenditure, not as between solicitor and client, but as between opposing parties.
45. In those circumstances, it seems to me that the appellant cannot satisfy condition (c) in rule 44.18(5), and I am not at all sure that condition (b) is satisfied either. There is no particular element in the respondent's draft bill of costs which is unreasonable or disproportionate in itself. What is objected to is the rates to be charged. It may be that more hours will be devoted to the case than is really called for, but both that and the question of rates are central to the issues that would arise on an assessment of costs after the event. The costs judge provides the protection to which the appellant is entitled in that respect. That being so, to make a CCO would be inconsistent with the requirements of rule 44.18(5).
46. These are the reasons which led me to conclude that Sedley LJ's second order ought to be discharged and that no order ought to be made in its place limiting the appellant's contingent liability for the respondent's costs, if she fails in her appeal.

Lord Justice Moses

47. I agree

Lord Justice Maurice Kay

48. I also agree.