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

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Newport Crown Court and Cardiff Civil Justice Centre
		30 July 2015

Mr Justice Jeremy Baker:

1. This judgment concerns the issue of costs arising from my earlier judgment in relation to liability and quantum dated 23^rd April 2015. Although the order which followed that judgment, dated 12^th May 2015, made certain provisions as to costs, I invited further written submissions, following which a final order as to costs would be determined upon the basis of those submissions.
2. I now have before me written submissions; on behalf of the 1^st and 2^nd defendants dated 27^th May and 12^th June 2015; on behalf of the claimants dated 29^th May 2015, and; on behalf of the 4^th defendant dated 30^th May 2015. I have also belatedly received written submissions both from and on behalf of the 3^rd Defendant on 29^th July 2015.
3. The competing submissions include: a claim by the 1^st and 2^nd defendants for their costs to be paid by the claimants on an indemnity basis; a claim by the claimants that the 4^th defendant should contribute to the payment of the costs of the 1^st, 2^nd and 3^rd defendants, and; that as from the 22^nd July 2014 the 4^th defendant should be responsible for their costs on an indemnity basis. These various claims are resisted by the respective parties against whom they are sought. Until very recently, I had not received any written submissions from the 3^rd defendant. In their absence, and as it seemed to me that his interests in this matter were aligned to those of the 1^st and 2^nd defendants, I proposed to deal with them on that basis. As this appears to be in accordance with the written submissions which I have now received on 29^th July 2015, I will proceed to deal with the position of the 3^rd Defendant on that basis.
4. The court has a general discretion as to costs which is set out in CPR 44.2

"(1) The court has discretion as to –

(a) whether costs are payable by one party to another;

(b) the amount of those costs; and

(c) when they are to be paid.

(2) If the court decides to make an order about costs –

(a) the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party; but

(b) the court may make a different order.

…..

(4) In deciding what order (if any) to make about costs, the court will have regard to all the circumstances, including –

(a) the conduct of all the parties;

(b) whether a party has succeeded on part of its case, even if that party has not been wholly successful; and

(c) any 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 its case or a particular allegation or issue; and

(d) whether a claimant who has succeeded in the claim, in whole or in part, exaggerated its claim.

(6) The orders which the court may make under this rule include an order that a party must pay –

(a) a proportion of another party's costs;

(b) a stated amount in respect of another party's costs;

(c) costs from or until a certain date only;

(d) costs incurred before proceedings have begun;

(e) costs relating to particular steps taken in the proceedings;

(f) costs relating only to a distinct part of the proceedings; and

(g) interest on costs from or until a certain date, including a date before judgment.

(7) Before the court considers making an order under paragraph (6)(f), it will consider whether it is practicable to make an order under paragraph (6)(a) or (c) instead.

(8) Where the court orders a party to pay costs subject to detailed assessment, it will order that party to pay a reasonable sum on account of costs, unless there is good reason not to do so."

Moreover, the basis for the assessment of those costs in set out in CPR 44.3(1)

"Where the court is to assess the amount of costs (whether by summary or detailed assessment) it will assess those costs –

on the standard basis; or

on the indemnity basis,

but the court will not in either case allow costs which have been unreasonably incurred or are unreasonable in amount."

5. It is clear that the court has a wide discretion as to what costs orders may be made following a trial, and as to the basis upon which they are to be made. In relation to the issue as to whether the standard or indemnity basis should form the basis of any assessment, it is clear from Excelsior Commercial and Industrial Holdings Ltd v Salisbury Ham Johnson [2002] EWCA Civ 879, that the indemnity basis may be justified where either the facts of the case and/or the conduct of the parties is such as to take the situation away from the norm. In this regard, it is not always necessary to show deliberate misconduct, in some cases unreasonable conduct to a high degree will suffice. Moreover, in relation to the issue as to whether some contribution should be made by an unsuccessful defendant to a successful defendant's costs, either under a Sanderson or Bullock type order, the Court of Appeal has explained in Irvine v Commissioner of Police for the Metropolis [2005] EWCA Civ 129 that this may be of particular benefit where the proceedings arose out of a situation in which the claimant was unaware as to which of two or more defendants was responsible for a wrong done to him, and he is at risk of his award of damages from the unsuccessful defendant, being eroded or eliminated by an order for costs in favour of the successful defendant. Some of the matters which may be of relevance to the making of such an order include: whether the original decision to join the successful defendant was unreasonable; whether the claims against the respective defendants were made in the alternative, and; whether one defendant is blaming the other.
6. In the present case the claim in libel arose out of 3 publications which the claimants alleged had been jointly published by the defendants as part of a campaign to defame them, namely; the update; the dossier, and; the website. However, in reality, as became clear during the course of the trial, although the claimants always had sound evidence against the 4^th defendant for the publication of the dossier and the website, their evidence against the 1^st, 2^nd and 3^rd defendants was at best thinly inferential, and in reality was without any proper foundation. As the 2^nd claimant acknowledged in evidence, the real reason why proceedings had been brought against the 1^st, 2^nd and 3^rd defendants, as opposed to others against whom a similarly weak claim could have been made, was due to their support for the injunction proceedings which had been taken against the claimants in December 2011. Indeed, during the claimants' cross-examination of the 1^st defendant, it was expressly suggested to him that it was the 4^th defendant who had been spreading lies about them, albeit the 1^st defendant was content for him to do so.
7. In my judgment the claim by the claimants against the 1^st, 2^nd and 3^rd defendants, was not one that ought reasonably to have been pursued. Indeed, as I observed in my earlier judgment, I consider that it may well be that the real motive behind the present proceedings was to effect a delay in the resolution of the concerns of a significant section of the mosques' congregations in relation to the governance of the mosques; a matter which I consider may well have been to the benefit of the claimants, because of the distinct impression with which I was left at the conclusion of the 2^nd defendant's evidence, namely that there was a lack of transparency and accountability in the management of the mosques, and a concomitant reluctance for there to be any alteration in the status quo.
8. It seems to me that this motivation may explain what I consider to be the wholly unreasonable reluctance by the claimants to enter into settlement negotiations and/or to accept the reasonable offers made by the 1^st and 2^nd defendants for the claimants to withdraw their claim against them; the history of which is set out between paragraphs 25 – 50 of the 1^st and 2^nd defendants' written submissions dated 27^th May 2015. It may also explain both what I consider to be a lack of proper engagement in the preparations for trial, set out between paragraphs 51 – 63 of those written submissions, and the repeated unfounded applications made by the claimants to adjourn the trial.
9. In these circumstances I consider that the conduct of the claimants in this case, in relation to the claim against the 1^st, 2^nd and 3^rd defendants, was of such a nature and degree that it does justify the assessment of their costs against the claimants on an indemnity basis.
10. Equally, I do not consider that it would be appropriate to make an order that the 4^th defendant should pay some contribution to the 1^st, 2^nd and 3^rd defendants' costs, either by way of a Bullock or Sanderson type order. The reality, as I have already observed, is that in relation to the dossier and the website, although the claimants had strong evidence against the 4^th defendant, they had no such evidence against the 1^st, 2^nd and 3^rd defendants. This was not a claim in which the claimants were unaware as to which of a number of potential defendants to sue, the claim was not made in the alternative, and the defendants did not seek to blame each other. I appreciate that this may mean that the claimants' award of damages against the 4^th defendant may well be eroded or eliminated by having to pay the costs of the 1^st, 2^nd and 3^rd defendants. However, this is directly attributable to the unreasonable conduct of the claimants in pursuing their claim against the 1^st, 2^nd and 3^rd defendants, and is therefore not a matter which should be compensated for by such an award of costs against the 4^th defendant.
11. At paragraph 36 of their written submissions dated 29^th May 2015, the claimants submit that as from 22^nd July 2014 the 4^th defendant should be responsible for their costs on an indemnity basis. In furtherance of this submission they rely upon paragraphs 28 and 32 of those submissions, which, in the intervening paragraphs, set out the history of the trial after 29^th July 2014, which was adjourned due to the apparent ill health of the 4^th defendant. Thereafter when the trial was resumed on 15^th December the 4^th defendant failed to attend, and instead provided medical evidence as to his present state of health. Thereafter once it had been decided to continue the trial in his absence, the 4^th defendant submitted voluminous written submissions upon the subject matter of the trial.
12. In these circumstances it is submitted that the 4^th defendant's actions, "…are unreasonable and have lead to an increase in costs for which he should be liable." Much as I accept that there was no sufficient medical evidence to justify the absence of the 4^th defendant at the adjourned hearing, and that his absence was likely at least in part to have been motivated by a desire to avoid cross-examination, I do not consider that there was any increase in costs due to this aspect of his conduct of the trial. Not only was the adjournment of the original trial at some point after the 29^th July 2014 inevitable, due to the commitments of those in attendance at the trial, but in reality the absence of the 4^th defendant from the adjourned trial saved rather than expended further costs. In these circumstances I do not consider that this affords the claimants any grounds for claiming costs against the 4^th defendant on an indemnity basis.
13. There are two further aspects of costs which require to be considered. Firstly the extent of the order for costs to be paid by the 4^th defendant to the claimants, and secondly whether the 4^th defendant should be ordered to make an interim payment on account of those costs.
14. In relation to the first issue, two matters are of significance. Firstly, although the 4^th defendant was found to be liable in relation to the publication of the dossier and the website, he was not found to be liable in relation to the publication of the update; such that he should only be liable to pay to the claimants those costs which can be properly attributable to litigating the dossier and website to trial. Secondly, although it is appropriate for him to be responsible for the costs occasioned by the claimants in pursuing him to trial, it is inappropriate that he should be responsible for the additional costs occasioned by the claimants in pursing the remaining defendants to trial. It seems to me that, rather than leaving these issues to be considered in the course of any detailed assessment, as I presided over the trial, and having regard to the overriding objective, it would be more proportionate if I determined at this stage the percentage of the claimants' costs for which the 4^th defendant is liable.
15. In this regard, I am of the view that firstly, it would be reasonable to consider that whereas 30% of the claimants' costs were expended on litigating the update alone, the remaining 70% were expended on litigating the dossier and the website, being 45% and 25% respectively. Secondly, I am of the view that although the majority of these costs would have been expended in any event if the claimants had pursued only the 4^th defendant to trial, there have been additional costs expended by the claimants in pursuing the remaining defendants to trial, which should not be borne by the 4^th defendant. I consider that these costs amount to 20% of the total, such that the amount of the claimants' costs for which the 4^th defendant is liable to pay to them is 56% of their reasonable costs to be assessed on a standard basis.
16. In relation to the second issue, namely the liability of the 4^th defendant to make an interim payment to the claimants on account of costs, CPR 44.2(8) provides for the making of such an order, unless there is good reason not to do so. In the present case there is no such good reason, but, bearing in mind that the claimants will only be entitled to an order for a percentage of their total costs from the 4^th defendant, the order will be in the sum of £25,000.00.
17. In these circumstances, save for paragraphs 3 and 4 of the previous order in relation to costs dated 12^th May 2015 which will remain, I will substitute the following orders:

i. The claimants shall pay the 1^st, 2^nd and 3^rd defendants' reasonable costs on the indemnity basis, such costs to be subject to detailed assessment if not agreed;

ii. The 4^th defendant shall pay 56% of the claimants' reasonable costs on the standard basis, such costs to be subject to detailed assessment if not agreed;

iii. The 4^th defendant shall pay the claimants the sum of £25,000.00 by way of an interim payment on account of costs by 4.00 pm on 10^th August 2015.