England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
ADMINISTRATIVE DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		15/12/2011

The Honourable Mr Justice Owen:

1. The parties have made written submissions on the issue of costs. The claimant seeks an order for costs against the defendant to be subject to detailed assessment if not agreed, for an order for payment of a sum representing 60% of its costs to be paid within 14 days of the costs order, and for an order for interest on costs pursuant to CPR.r44.3(6)g. The defendant contends that an appropriate order would be that there be no order as to costs.
2. The principal issue between the parties is whether there should be a departure from the general rule that an unsuccessful party will be ordered to pay the costs of the successful party, given that the claimant succeeded only on one of his grounds of challenge to the consultation. Secondly there is an issue as to the proper approach to the costs incurred in relation to the oral permission hearing before for Burnett J.
3. The general rule as to the exercise of the court's discretion to make an order for costs contained in CPR r 44.3(2) is "…that the unsuccessful party will be order to pay the cost of the successful party". Under r 44.3(4) in deciding what order to make the court must have regard to all the circumstances including the conduct of the parties and whether a party has succeeded on only part of his case. The conduct of the parties includes "whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue" (r 44.3(5)).
4. The CPR provide further guidance as to their application. Thus at 44.3.14 the notes to r 44.3 contain the following –

"The court should be more ready than before CPR to make costs orders which reflect not merely the overall outcome of the proceedings but also the loss of particular issues… As to the correct approach to making an issue based costs order, the Court of Appeal accepted the principle that the claimant is entitled to put their case at its highest. There is however a distinction between putting the case at its highest and advancing a basis for relief on the basis that fails (especially if it is entirely unsupportable). There was no reason why the losing party should bear the costs in relation to an issue which simply could not succeed."

5. As to the issue of whether there should be a departure from the general rule, Mr Mclean QC took as his starting point the judgment of Sir Thomas Bingham MR in Roache v News Group Newspapers Ltd [1998] EMLR 161 CA (Civ) in which he said:

"The judge must look closely at the facts of the particular case before him and ask: who, as a matter of substance in reality, has won? Has the plaintiff won anything of value which he could not have won without fighting the action through to a finish? Has the defendant substantially denied the plaintiff the prize which the plaintiff fought the action to win? "

6. He submits that the answer to that question is clear. By its application for judicial review the claimant sought an order quashing the consultation concerning the reconfiguration of paediatric congenital cardiac services by the JCPCT as flawed and unlawful, and succeeded in that objective.
7. He submits that notwithstanding that the claimant succeeded on only one of the issues to which the claim gave rise; my rejection of its arguments in relation to the remaining issues had no bearing on the outcome of the proceedings. He invited my attention to the decision of Laddie J in Cambridge Antibody Technology Ltd v Abbott Biotechnology Ltd [2005] EWHC 357, in support of the proposition that where the essence of the case is about a particular issue, and the successful party wins on that issue, it is inapt to apply any, or any significant reduction to the claimant's costs by way of derogation from the general rule, and submitted that the essence of this case was whether the consultation should be quashed as unlawful.
8. Mr Garnham QC submits that as the claimants succeeded on a single issue, and as the defendant succeeded on the remaining six issues identified at paragraph 79 of my judgment, to award the claimant their costs or any substantial part of their costs, would be neither fair nor just.
9. He argues that the costs incurred in relation to the issue upon which the claimant succeeded, the issue of breach of a legitimate expectation, represented a relatively small proportion of the costs as against those incurred in relation to the remaining issues, in particular the issue of pre-determination, which was undoubtedly at the forefront of the claimant's case. He submits that the extensive disclosure sought on behalf of the claimant, and the evidence adduced on both sides, were directed primarily to the attack on the good faith and independence of the decision makers, challenges that failed. Similarly he argues that relatively little court time was directed to the legitimate expectation challenge on which the claimant succeeded.
10. In response Mr Mclean submits that had the challenge been limited to the ground on which the claimant succeeded, it would nevertheless have been necessary for the issue to have been put in context, and that the arguments advanced in relation to each of the issues were made against the same factual and documentary background. He argues that it is commonplace for a challenge by way of judicial review to advance a number of grounds based on the same factual matrix, and for a claimant to succeed on one but to fail on others. That is undoubtedly so, but is not this case, in that the ambit of the factual enquiry would have been more limited had the claim been confined to the ground on which the claimant succeeded. I am satisfied that there would have been a reduction in the evidence; and disclosure would have been focussed on that issue alone, and in consequence would have been reduced. Similarly the hearing before me, would undoubtedly have been shorter.
11. But in my judgment there are two factors of critical importance in deciding whether to depart from the general rule. Firstly in considering the conduct of the case by the claimant, and in particular whether it was reasonable for the remaining issues to have been pursued, it has to be borne in mind that Burnett J gave permission to argue all the claimant's grounds after a fully contested hearing. It is therefore difficult for the defendant to argue that it was not reasonable for the claimant to have pursued all its grounds of challenge.
12. Secondly the claimant succeeded in obtaining the relief sought, and failure on the grounds of challenge other than that on which it succeeded did not affect the outcome. In those circumstances I am not persuaded that the fact that a limitation of the claim to the ground on which the claimant succeeded would have resulted in some reduction in costs, warrants a departure from the general rule.
13. Had I been persuaded to depart from the general rule, then it would have been necessary to have addressed the subsidiary issue, namely whether the claimant should in any event be entitled to the costs of the permission hearing. But in the light of my conclusion as to the application of the general rule, the point does not arise.
14. Payment on Account

The claimant seeks an order for a payment on account of a sum representing 66% of its costs. The defendant does not resist an order that "… they pay a modest proportion of the costs the claimants' solicitors anticipate will be due."

15. In SS Home Department v C [2011] EWHC 2513 (Admin) I sought to set out the proper approach to such an application. Mr Maclean invites me to adopt that approach and that of Jacob J in Mars UK Ltd v Teknowledge Ltd [1999] 2 Costs LR 44.
16. I am satisfied that I can with confidence approach the quantum of a payment on account on the basis that the claimant will recover not less than two thirds of its solicitors' assessment of their costs to date of judgment, namely £377,300. There will therefore be a payment on account of £250,000 to be paid within 28 days of the order.
17. Interest

The claimant seeks an order for interest on their costs at the rate of 1% per annum above Barclays Bank base rate from the date of payment of which tranche of the same by the claimant to the date of the order.

18. The defendants do not resist an order that interest be paid at 1% above base on the outstanding costs found due from the date on which such costs were incurred.
19. Accordingly there will be an order for payment of interest in the terms sought by the claimants.