ON APPEAL FROM THE CENTRAL LONDON COUNTY COURT
(HHJ MARSHALL QC)
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE PATTEN
LORD JUSTICE SULLIVAN
- and -
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Mr Jamie Clarke (instructed by Plexus Law) appeared on behalf of the Respondent.
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Lady Justice Arden:
"At the end of the day, though, the fact is that I have formed the clear view that the prosecution of this case by the claimant – in reality, as Mr McTague submits, this is by the credit hire company – has been conducted with an attitude which is that of a commercial enterprise, seeing the conduct of litigation as a revenue earning exercise and with a readiness to take its chances on that basis rather than with a more dispassionate and responsible attitude to the the principles of the correct conduct of litigation. I find that this was the reason why there was really no attempt made, either to mitigate the losses supposedly accruing to Mr Abbottt, or, indeed to give a rigorous consideration to the soundness of his claim for credit hire charges, and whether, and in what amount, this should be pursued against the defendant, as opposed to being conducted rather in the credit hire company's commercial interests, and applying the commercial considerations of opportunity exploitation to its pursuit. That strikes me as a very significant matter of conduct in cases of this kind, because it is obviously heavily to be discouraged that issues of mitigation of damages should be approached without due regard for principle and only on the latter kind of basis. This can only tend to increase litigation and to put unfair and unreasonable pressure to opposing litigants."
"The overall conclusion I have come to therefore, on hearing the arguments on both sides, is that the order I should make in these circumstances is that there be no order as to costs. I do so particularly because of the balance between the following two principal considerations. On the one hand Mr Williams points out that once it was accepted by Ms McTague that in fact, there would at least have had to be a fast track trial in any event, and where his client has made some recovery as a result, it is extremely difficult to justify any order requiring Mr Abbott to pay any costs to Mr Long. On the other hand, owing to the way in which the matter has been conducted on the part of Mr Abbott, without, as I see it, any proper regard for Mr Abbot's duty to seek to mitigate his loss or to keep his expenses to an appropriate level for someone spending his own money rather than someone else's, and where the defendant has had a significant measure of success both in resisting that last point in particular, and also establishing a measure of liability which shows that Mr Abbott was vulnerable to a potential cross claim, I also do not consider it right that Mr Long should pay any costs to Mr Abbott."
"(4) In deciding what order (if any) to make about costs, the court must have regard to all the circumstances, including –
(a) the conduct of all the parties;
(b) whether a party has succeeded on part of his case, even if he has not been wholly successful; and
(c) any payment into court or admissible offer to settle made by a party which is drawn to the court's attention, and which is not an offer to which costs consequences under Part 36 apply.
(5) The conduct of the parties includes –
(a) conduct before, as well as during, the proceedings and in particular the extent to which the parties followed the Practice Direction (Pre-Action Conduct) or any relevant pre-action protocol;
(b) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;
(c) the manner in which a party has pursued or defended his case or a particular allegation or issue; and
(d) whether a claimant who has succeeded in his claim, in whole or in part, exaggerated his claim."
"This is an appeal...in relation to costs. As such it is overcast, from start to finish, by the heavy burden faced by any appellant in establishing that the judge's decision falls outside the discretion in relation to costs... For reasons of general policy, namely that it is undesirable for further costs to be incurred in arguing about the costs, this court discourages such appeals by interpreting such discretion very widely."
The respondent has also cited in his skeleton argument a passage from the judgment of Waller LJ in Straker v Turner Rose on the practice of this court in relation to interfering with discretion:
"It is well known that this court will be loath to interfere with the discretion exercised by the judge in any area, but so far as costs are concerned that principle has a special significance. The judge has the feel of a case after the trial, which the Court of Appeal cannot hope to replicate, and the judge must have gone seriously wrong if this court is to interfere."
As I have already indicated, the issues at trial were liability. But it is not now contested that the respondent should pay 25 per cent of the damages. There was no offer by the respondent. There was an issue as to whether the appellant had properly mitigated his loss at the trial, and that is dealt with in the way that I have indicated.
"In addition to looking at it in terms of costs consequences, the court is entitled in an appropriate case to say that the misconduct is so egregious that a penalty should be imposed upon the offending party. One can, therefore, deprive a party of costs by way of punitive sanction. Given the judge's findings of dishonesty in this case, that may be appropriate here. I sound a word of caution: lies are told in litigation every day up and down the country and quite rightly do not lead to a penalty being imposed in respect of them. There is a considerable difference between a concocted claim and an exaggerated claim and judges must be astute to measure how reprehensible the conduct is."
"Mr Roberts' submission is that a judge must balance the factors on either side. I accept that this must be so, in relation, that is, to factors relevant to the issue of costs. In the main this will be conduct which is causative of a waste of costs (such as a failure to make proper disclosure) but there are occasions when it may be appropriate for the court to mark its disapproval of a party's conduct by making a particular order as to costs, relevantly for the purpose of this case by disallowing costs, even if the conduct was not causative of any or any significant waste of costs. I would, however, accept that any such disallowance must be proportionate to the conduct in question. I note that proportionality was in effect the reason why Patten LJ gave permission to appeal in this case on a renewed application."
In that passage, I make it clear that if the court is going to deprive a party of costs on the grounds of misconduct which has not been causative of a waste of costs, it should be satisfied that that sanction is a proportionate sanction.
Lord Justice Patten:
Lord Justice Sullivan:
Order: Appeal dismissed.