England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		18 October 2010

JUDGMENT ON COSTS

The Hon. Mr Justice Supperstone :

1. Paragraph (5) of the Order dated 23 September 2010 entering judgment on the preliminary issues directs that:

"The following costs are reserved to the trial Judge accordingly:

(a) all outstanding costs of the Claimants' application dated 8 April 2009 including the Defendants' costs of complying with paragraphs 1-6 of the Order of Master Rose dated 18 June 2009;

(b) the costs of the amendment, re-amendment and re-re-amendment of the Statements of Case;

(c) the costs of the preliminary issue; and

(d) detailed assessment of the Claimants' publicly funded costs of the above."

2. Pursuant to paragraph (3) of the order the Claimants made written submissions dated 30 September 2010 and the Defendants made written submissions also dated 30 September 2010.
3. The primary issue for determination is the costs of the trial of the preliminary issues and other costs incurred in relation thereto.
4. The Claimants submit that the appropriate order is costs in the case or costs reserved. The Defendants submit that the Claimants pay one third of the Defendants' costs of the trial of the preliminary issues (and certain other costs relating thereto) in any event to be the subject of detailed assessment if not agreed, but not to be enforced without leave of the court save by way of set-off as against damages and/or costs.
5. There were three preliminary issues. The Defendants succeeded on issues 1 and 2 and the Claimants on issue 3. In my view costs should follow the event. The Claimants chose to litigate issues 1 and 2 as preliminary issues. The Defendants consented to the Order of Master Leslie dated 12 February 2010 directing that there be a trial of preliminary issues, however at all times it was their submission that the Claimants' arguments in respect of issues 1 and 2 were without foundation. The Claimants having applied for a trial of issues 1 and 2, the Defendants proposed the inclusion of issue 3. The Defendants submit, and I agree, that "in essence, issues 1-3 were each discrete, free-standing, win-or-lose issues and specific costs orders in respect of them could equally have been made had they been pressed at a full trial, whatever the ultimate outcome." (para 2.10 of Defendants' skeleton argument).
6. Issues 1, 2 and 3 were of roughly equal "size" in terms of length of argument and time taken at trial. As the Defendants were successful on issues 1 and 2 and unsuccessful on issue 3, in my view the Claimants should pay the Defendants one third of their costs of the preliminary issues. I am not persuaded that the considerations put forward by the Claimants at paragraph 5 of their written submissions warrant the making of the order that they seek.
7. The Defendants accept that any order that costs be paid by the Claimants should be made subject to the proviso that it is "not to be enforced without leave of the Court". However, they submit that the addition of a Lockley proviso allowing for enforcement "by way of set-off as against damages and/or costs" should follow "as a matter of justice and fairness" (para 3.1 of Defendants' skeleton). I agree that a set-off of costs against costs is "natural and equitable" (Lockley v National Blood Transfusion Service [1992] 1 WLR 492 (CA), per Scott LJ at p.497D). However I am not satisfied that a set-off of costs against damages has been shown to be justified so as to warrant the making of an order in that regard at the present time. The Defendants may in due course seek the leave of the Court to enforce the whole or part of the costs order in the usual way and will no doubt make such an application if the circumstances then prevailing warrant it.
8. In my view the Defendants are also entitled to their costs in any event (a) of the Claimants' application dated 8 April 2009 incurred from 19 June 2009; and (b) of the Re-Amendment and Re-Re-Amendment of the Defence.
9. The Defendants' costs of complying with paragraphs 1-6 of the Order of Master Rose dated 18 June 2009 including the Defendants' costs of the Amendment of the Defence are not attributable solely to the advancement and trial of issues 1 and 2. In my view they should be costs in the case.
10. I make no order as to the following costs: (a) the balance of the Claimants' costs of their application dated 8 April 2009 (including those reserved by paragraph 10 of the Order of Master Rose dated 18 June 2009); and (b) the Claimants' costs of the Amendment and Re-Amendment of the Claim Form and Particulars of Claim, for the reasons given at paragraphs 2.14-2.17 of the Defendants' written submissions.
11. I order that there be detailed assessment of the Claimants' publicly funded costs of their application dated 8 April 2009, the Amendment and Re-Amendment of the Claim Form and Particulars of Claim and the trial of the preliminary issues.

Summary

12. I make an order in the terms of the draft order submitted by the Defendants, together with their written submissions, with one amendment, namely that the words "damages and/or" be deleted from the third line of paragraph (1). Accordingly the order I make in relation to the Defendants' costs of the preliminary issues is as follows:

"(1) The Claimants do pay the following costs in any event to be the subject of detailed assessment if not agreed but not to be enforced without leave of the Court save by way of set-off as against costs:

(a) the Defendants' costs of the Claimants' application dated 8 April 2009 incurred from 19 June 2009;

(b) the Defendants' costs of the Re-Amendment and Re-Re-Amendment of the Defence; and

(c) one third of the Defendants' costs of the trial of the preliminary issues (save for the costs of the pre-trial review on 25 May 2010 which were ordered to be costs in the case)."