England and Wales High Court (Technology and Construction Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		31/10/2008

The Honourable Mr Justice Ramsey

Introduction

1. This case concerns a fire at a ball mill at a domestic waste recycling plant at Bursom in Leicester. Following a judgment handed down in January 2008 which dealt with liability, I handed down judgment on 19 September 2008 in relation to quantum. In that judgment ("the Quantum Judgment") I held that the Claimants ("Biffa") were entitled to recover £140,249 plus interest from the Second Defendant ("OT").
2. On 8 October 2008 a hearing was held to deal with any applications arising from the Quantum Judgment. This judgment deals with the issue of costs of the action raised at that hearing. That issue was the subject of submissions on 8 October 2008. Subsequently and as permitted under my order made at the hearing on 8 October 2008, the parties have exchanged further evidence on 17 and 22 October in order to put before me further documents and explanations relied on for the purpose of their cost submissions.
3. In summary, Biffa submitted that they were entitled to recover their costs whilst OT submitted that there should be no Order as to costs.

Background

4. On 6 January 2006 Herbert Smith, acting on behalf of Biffa, wrote a Letter of Claim to OT pursuant to the Pre-Action Protocol for Construction and Engineering Disputes. In that letter they set out their overall claim for loss and damage in the sum of £1,893,991.22 and attached a report of Mr Damian Glynn which set out the detail of the financial losses of £1,875,081.00.
5. On 20 January 2006 Ince & Co, acting on behalf of OT, acknowledged the Letter of Claim. On 3 February 2006 Ince & Co wrote again and set out in a one-page fax why they contended OT was not liable to Biffa. They did not deal with quantum.
6. Herbert Smith responded to Ince & Co on 22 February 2006 and asked Ince & Co when they could expect to receive a Letter of Response under the Pre-Action Protocol. On 28 February 2006 Ince & Co requested a further period of 6 weeks. Herbert Smith responded on 8 March 2006 saying that they were taking instructions. No further correspondence appears to have taken place until 10 April 2006 when Ince & Co requested a further 4 weeks, until 9 May 2006, for the Letter of Response. Herbert Smith responded on 2 May 2006 to say they were entitled to proceed to issue proceedings but would take account of any Letter of Response received in the meantime.
7. No Letter of Response was served by OT and there was no further correspondence until Herbert Smith wrote on 30 June 2006 to say that they had been instructed to issue proceedings. Ince & Co confirmed that they were instructed to accept service. Biffa issued proceedings on 8 August 2006. In the Particulars of Claim Biffa claimed loss and damage at paragraph 41. They stated that full particulars would be pleaded in due course by way of a separate schedule but provided an outline assessment at Annexure 3 in the sum of £1,952,253.70.
8. In the Defence served on 18 October 2006 OT denied the claim and said that OT "cannot respond in any meaningful way to the outline assessment of damages in Annexure 3 because of its vagueness." OT reserved the right to plead further in due course and stated that the losses in Annexure 3 appeared to be purely economic losses and irrecoverable in tort.
9. A first Case Management Conference was held before Mr Justice Jackson on 11 January 2007 and by the Order for Directions, it was directed that Biffa should serve a Schedule of Loss, which they did on 23 February 2007.
10. The First Defendant ("MEH") who played an active part until January 2008, submitted a detailed Counter-Schedule on 19 April 2007. OT submitted a document running to six paragraphs on 20 April 2007 in which it was stated at paragraphs 1 to 4 that the Claimants must prove a sufficient possessory right to claim damages in tort. In relation to the financial model it was stated at para 5 and 6 as follows:

"Notwithstanding the above, the Claimants must prove that the Financial model described under the heading 'C Overall Methodology' is an appropriate model upon which to base a damages claim founded in tort.

Without prejudice to the foregoing, many of the losses claimed are too remote and were not foreseeable. For example, it is not foreseeable that if a ball mill is damaged by fire the Claimants will suffer loss because another facility, the Wanlip site, cannot function or fully function without the [Bursom] mill functioning."

11. Under the Order for Directions made on 11 January 2007 there were also directions for disclosure and exchange of witness statements. In addition, meetings were ordered for experts, including those dealing with quantum, with joint statements by 18 May 2007. Expert reports were to follow and the trial was fixed to commence in July 2007.
12. On 2 May 2007 OT made an application under CPR Rule 24 to obtain summary judgment against Biffa. On 9 May 2007 Ince & Co proposed that, in the meantime, the expert meeting and expert reports should be postponed by a period of two weeks. This was not agreed by Biffa or MEH and Mr Glynn and Mr Martin Hall instructed on behalf of MEH met on 14 May 2007.
13. I heard OT's application under Part 24 and dismissed that application for reasons set out in my judgment given on 23 May 2007.
14. On 25 May 2007 OT instructed Mr James Stanbury as its expert to deal with the quantum of Biffa's Claim.
15. Following their meeting on 14 May 2007 Mr Glynn and Mr Hall produced a joint statement dated 1 June 2007 in which they set out their respective positions on the detail of Biffa's quantum. At that stage, Mr Stanbury's position was recorded in the joint statement as follows: "Mr Stanbury currently has no further comments to add to Mr Glynn's and/or Mr Hall's respective positions."
16. Mr Glynn served his expert's report on 12 June 2007 in which he summarised quantum at £1,675,000. Mr Hall assessed Biffa's claims on two different bases and for two different periods of delay, in his report of 13 June 2007. His assessment of quantum was as follows:

(1) Performance at contractually specified levels: for 15 months delay: £493,849: for 7 months delay: £269,182;

(2) Performance not achieving contractually specified levels: for 15 months delay: £278,391; for 7 months delay £190,240.

17. In his report dated 12 June 2007 Mr Stanbury said at paragraph 5.02

"My calculation of the Claimant's losses amounts to a loss of £nil. As noted above, I consider my calculation may be subject to revision once I receive clarification as to the nature, value and records supporting certain costs which form the basis of my savings calculations."

18. The quantum experts produced a second joint statement dated 2 July 2007 in which they set out calculations for a 15 month and 7 month period of delay as follows:

(1) 15 months: Mr Glynn £1,674,000; Mr Hall (contractual) £1,041,066; (non-contractual) £93,340; Mr Stanbury : no loss.

(2) 7 months: Mr Glynn £969,000; Mr Hall (contractual) £546,245: (non-contractual) £127,167 ; Mr Stanbury £14,110.

19. Originally quantum and liability were to be heard at the same time at the hearing in July 2007. There were two issues which meant that, in the end, a division of quantum and liability proved necessary.
20. First, MEH had pleaded that any claim by Biffa against it for consequential losses was limited by the liquidated damages clause. On 25 June 2007 Biffa amended to plead an alternative claim for liquidated damages for delay. This meant that as between Biffa and MEH there might be no necessity for an investigation into the detail of quantum.
21. Secondly, whilst Mr Glynn and Mr Hall had been able to define agreements and disagreements in the joint statement of 1 June 2007, the introduction at that stage of Mr Stanbury's views of quantum contributed to the experts being unable to formulate their position in relation to quantum issues.
22. I therefore directed that the trial due to commence in July 2007 should be limited to liability, the effect of the liquidated damages clause as between MEH and Biffa and the period of delay caused by the fire.
23. In January 2008 I gave directions for the trial of quantum, leading to a hearing in June 2008. By that time, MEH had apparently become insolvent and ceased to take part in the proceedings. As a result, I gave directions for further meetings between Mr Glynn and Mr Stanbury. In the third joint statement prepared by the quantum experts on 23 May 2008, Biffa's claim was valued by Biffa's expert at some £334,757. By the time of the hearing in June 2008, the issues between the parties had become limited and were dealt with in my judgment leading to a total due to Biffa of £140,249 plus interest.

Submissions on costs

24. Mr David Allen QC on behalf of OT submits that the normal rule that costs should follow the event would be inappropriate in this case. He submitted that the claim advanced by Biffa was just short of £2million and that Biffa had recovered only £140,249 which was a trifling sum compared to Biffa's costs which were stated to be in excess of £1million, with OT's costs being £500,000 and MEH's costs being similarly substantial.
25. He submitted that Biffa's claim was presented on a false basis of contractual assumptions as to performance when Biffa had evidence of actual performance. If Biffa had advanced its claim for its true value, it was submitted that the case would never have fought and the vast majority of the costs now incurred would have been saved. He further submitted that costs of over £1million were not proportional to the value of the claim.
26. On that basis it was submitted that there should be no order for costs or that Biffa should only recover a proportion of its costs proportionate to the value of the claim.
27. Mr Ben Patten on behalf of Biffa submitted that Biffa had been the successful party and should be entitled to recover its costs. He submitted that they had established liability against OT and recovered substantial damages against OT. In terms of offers he pointed out that OT made no offer until 19 June 2008 whereas Biffa had made a series of offers which went unanswered. In relation to an offer made by Biffa on 18 June 2008 to accept a sum of £125,000, it is submitted that in the light of the sum ultimately awarded, Biffa was entitled to indemnity costs and higher interest. Mr Patten also submitted that OT did not properly comply with the Pre-Action Protocol.

The law

28. Under CPR rule 44.3(2)(a) the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party. In this case that would lead to OT paying Biffa's costs.
29. CPR rule 44.3(2)(b) provides that the court may make a different order and in deciding whether to do so, the court under CPR rule 44.3(4) has to have regard to all the circumstances including the conduct of the parties, whether a party has succeeded on part of its case and whether there is any admissible offer to settle.
30. CPR rule 44.3(5) provides that 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 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.
31. In this case the issues raised concern these aspects:

(1) The fact that Biffa pleaded a claim of nearly £2million but has recovered only £140, 249;

(2) The expenditure by Biffa of costs in excess of £1million in pursuing the claims;

(3) The failure of OT to make any offers before June 2008;

(4) The effect of the offers made in June 2008;

(5) The failure of OT to participate in the Pre-Action Protocol process or to respond to Biffa's offers.

32. I have been referred to a number of authorities concerning costs, including the following:

(1) In Johnsey Estates v. Secretary of State for the Environment [2001] EWCA Civ 535 the landlord sought damages for breaches of a repairing covenant. The landlord claimed over £2.25million plus interest and the judge awarded £236,000 inclusive of interest. The tenant had made a payment into court of £200,000 on 25 September 1996 and a further £250,000 on 19 February 1999. The tenant sought to persuade the court that the landlord should be deprived of its costs from 26 September 1996 to 19 February 1999. Chadwick LJ dealt with the submission as follows at paragraphs 31 and 32:

"His submission, in effect, was that the landlord was, throughout, seeking damages in amounts which were far in excess of the amount to which it was ultimately held entitled; and that it was the landlord's inflated and unrealistic valuation of its claims which had made it impossible to dispose of the action by agreement in 1996. He accepted, of course, that the amount of the first payment in turned out to be less than the amount to which the landlord was entitled; but he submitted that that was irrelevant; when the Secretary of State increased the amount notionally in court to £450,000, the landlord would not accept it. The action went on because the landlord was not interested in any reasonable offer; and, in those circumstances, the landlord must bear its own costs.

32. The submission has some superficial attraction on the facts of the present case; but, for my part, I would reject it. It seems to me that a court should resist invitations to speculate whether offers to settle litigation which were not in fact made might or might not have been accepted if they had been made. There are, I think, at least two reasons why a court should not allow itself to be led down that road. First, the rules of court provide the means by which a party who thinks that his opponent is not open to reason can protect himself from costs. He can make a payment in; he can make a Calderbank offer; now, under the Civil Procedure Rules 1998, he can make a payment or an offer under CPR Pt 36. The advantage of the courses open under the rules is that they remove speculation. The court can see what offer was made, when it was made, and whether it was accepted. Second, speculation is likely to be a most unsatisfactory tool by which to determine questions of costs at the end of a trial. It is not, I think, suggested that each party would be required to disclose, at that stage, what advice it had received, from time to time, as to the strengths and weaknesses of its claim or defence. But without knowing that – and without a detailed knowledge of the financial and other pressures to which each party was subject from time to time - speculation would be hopelessly ill-informed. If Mr Gaunt's submission were to be accepted generally, there would, I think, be a serious danger that, at the end of each trial, the court (in order to decide what order for costs it should make) would be led into another, potentially lengthy, inquiry on incomplete material into 'what would have happened if . . .?' I am not persuaded that that could be compatible with the overriding objective to deal with cases justly."

(2) In Hall v. Stone [2007] EWCA Civ 1354 the claimants had not recovered as much as they had claimed and the judge awarded them 60% of their costs. In allowing the appeal, Smith LJ considered that the claimants had been the successful party: they recovered damages when the defence was that they were not entitled to any damages; there was no Part 36 offer and the defendant had not won on an important issue. At paragraphs 72 to 74 Smith LJ said this:

"he would not have awarded them any costs but he thought that they had not succeeded altogether because they had not recovered as much as they had contended for. That question is best considered under the rubric of CPR 44.3(4) which requires the judge to consider whether a party has succeeded on part of his case even though not wholly successful. It seems to me that that provision is designed to allow the judge to take into account on costs the fact that the losing party actually won on one (or more than one) issue in the case. I do not think it means that the judge can cut down the costs of the successful party merely because he has not done quite as well as he had hoped.

73. What amounts to partial success will be a matter of fact and degree and will be case sensitive. The focus should be on the partial success of the losing party on an issue with costs consequences. The mere fact that the defendant has succeeded in keeping the damages down below the sum claimed by the claimant will not necessarily make him the victor or even a partial victor. Of course, where, as in Painting, the main issue in the case was whether the claimant had grossly exaggerated the claim and that issue had important costs consequences, it will be open to the judge to hold that the defendant was the victor. But if the claimant's exaggeration was no more than to put his case rather high, it does not seem to me that a defendant who has not made an effective and admissible offer can be regarded as the victor. I would accept that exaggeration by a claimant may be taken into account as 'conduct' under CPR 44.3(4)(a). However, for a defendant to regard himself as a winner or even partial winner on an issue of exaggeration, the exaggeration must be an important feature of the claim with costs consequences.

74. In the present case, it cannot be said that the respondent won on any issue or any part of her case. She succeeded only in keeping the damages down but, as she was contending throughout that there should be no damages at all and as she made no effective offer of settlement, that cannot amount to partial success. To the extent that the judge thought that the respondent had had partial success, I think he was in error."

(3) In Painting v. University of Oxford [2005] EWCA Civ 161 the claimant sought damages in a personal injury action of £400,000 but was awarded some £25,000. The University contended that she was exaggerating her symptoms. The hearing was taken up with that issue and the University won. In dealing with the question of exaggeration, Longmore LJ said this at paragraph 26 in relation to CPR rule 44.3(5)(b):

"25. I add very short observations on two matters only. The first is this. The court is required, as my Lord has said, to have regard to the conduct of the parties by virtue of Part 44.3(4)(a). Part 44.3(5) provides that the conduct of the parties includes: "(b) whether a claimant who has succeeded in his claim, in whole or in part, exaggerated his claim" The court therefore has to have regard to exaggeration.

26. However, exaggeration can take many forms and the rule makes no distinction between intentional exaggeration or unintentional exaggeration. Here, Mr Farmer was constrained to accept that Mrs Painting had been deliberately misleading in the course of the claim, and the fact that the exaggeration is intended and fraudulent is, to my mind, a very important element which needs to be addressed in any assessment of costs.

27. The second matter is that I agree with my Lord that it is relevant that Mrs Painting herself made no attempt to negotiate, made no offer of her own and made no response to the offers of the University. That would not have mattered in pre-CPR days but, to my mind, that now matters very much. Negotiation is supposed to be a two-way street, and a claimant who makes no attempt to negotiate can expect, and should expect, the courts to take that into account when making the appropriate order as to costs."

(4) In Islam v. Ali [2003] EWCA Civ 612 the claimant claimed to be entitled to £156,000, some £80,000 more than he had already received for running the business of the defendant's late husband. He was awarded a sum of £12,746 and the defendant was ordered to pay his costs. The Court of Appeal held that there should be no order for costs. Auld LJ said at paragraph 23:

"In my view, the reality of this case is that Mrs Ali was the winner. She was facing a claim substantially greater than the amount finally awarded. There were, as I have said, competing claims and offers, not only as to the manner of calculation of the amount due but as to the amount, an issue as to the latter ranging from nil to a balance of £80,000 after giving credit for the monies received. The sum of £12,746.41 ordered was arguably as limited a loss as it was a gain. And it emerged as a result, not only of Mr Islam losing the case on principle on the main issues in the case, but also as to the true amount due out of a very much larger claim. The disparity between what Mr Islam sought, including what he put Mrs Ali through to get it, and what he received was so large as to put the relatively small amount finally awarded in the balance between two rival contentions into relative insignificance."

33. These authorities illustrate the case sensitive nature of the exercise of discretion on costs. There are, however, the following principles relevant to this case:

(1) That there is a difference between a case where a party has recovered less than it has claimed so that there is unintentional exaggeration and a case where there has been intentional exaggeration, that is where a party has intentionally increased the claim or exaggerated symptoms so as to be deliberately misleading or fraudulent.

(2) Conduct under CPR rules 44.3(4)(a) and 44.3(5)(d) includes the question of whether a claimant who has succeeded in his claim, in whole or in part, exaggerated his claim. Where the claimant has put the case too high then any consideration of that fact must also take into account the fact that a party faced with such a claim can make a Part 36 offer.

(3) Where a party has not made an offer, the court should not speculate on what the position might have been had that party made an offer.

(4) Where a party makes no offers and does not respond to offers, the court may take that conduct into account in deciding on the appropriate order for costs.

(5) Where a party succeeds in reducing a claim and, in doing so, succeeds on the majority of the issues which formed the basis of the trial then such partial success can deprive the other party of its costs.

Analysis

34. With those features in mind, I now turn to consider the matters which are relevant in this case.
35. First, this is a case where OT decided at all stages up to May 2007 to base its defence on the fact that it had no liability. In response to the Letter of Claim served under the Pre-Action Protocol it challenged liability but did not properly engage on that or any other issue. The Letter of Claim was served in January 2006 and apart from a short letter in February 2006 and an indication from February 2006 onwards that a Letter of Response would be forthcoming, no such letter had been served by the time of the issue of the Claim Form in August 2006. This meant that OT did not engage in the quantum of Biffa's claim or in relation to Mr Glynn's report in support of it.
36. Equally, its response to the Schedule of Loss was brief and contained no challenge to the detail, unlike the Counter-Schedule served by MEH. Equally, OT did not engage in the expert discussions between the experts for Biffa and MEH in May 2007 so that the first Joint Statement in June 2007 contained no proper input on behalf of OT. It was only from 25 May 2007 that Mr Stanbury was instructed and his involvement in his report of 12 June 2007 and afterwards challenged the existing approach of the experts. It was also a factor in leading to a split trial of liability and quantum.
37. Secondly, as properly accepted by OT, this is not a case where Biffa intentionally exaggerated its claim. There were two particular issues which divided the experts. First, there was a question of the period of delay caused by the fire: was it 15 or 7 weeks? That was an issue which I determined in favour of the Defendants during the liability hearing. The second issue concerned the assessment of the performance of the plant which has had a number of initial problems. Mr Glynn's initial assessment was based on the predicted performance of the plant rather than actual performance which became available over the time of the litigation. Performance testing of the combined plant at Bursom and Wanlip only took place in the middle of 2007.
38. Equally, as the figures show, the ultimate sum recovered depends on income which this novel plant would produce, less savings which were made because the plant was not being operated for the period of delay. Biffa was saying that overall this gave a balance in their favour. From May 2007, when Mr Stanbury was instructed, OT was saying that the savings would exceed the income so that Biffa would make no recovery, or at most £14,110. The real issue was whether on balance any sum would be due to Biffa. In the end, Biffa obtained a positive sum in its favour. The figure was not insubstantial but was much less than Biffa claimed and much more than OT's figure.
39. Thirdly, this was a case where until June 2008 OT did not engage in any process in relation to Part 36 offers. Biffa made claimant's offers on 5 June 2007 and 6 July 2007 but received no response from OT. I do not consider that OT can now rely on the ultimate outcome to say that such offers indicated that Biffa viewed its claim at a level which was too high and unrealistic. It is for a party in the position of OT, if it wants to rely on offers, to make an offer itself. It is evident that it did not do so, seeking instead to rely on Mr Stanbury's view that the quantum figure was nil.
40. Again on 9 January 2008 Biffa made a further Part 36 claimant's offer which like the previous one dealt with the position of MEH's liability and made a proposal for settlement involving both parties. OT chose not to respond to that offer.
41. On 18 June 2008 Biffa again made a claimant's offer to settle the proceedings on the basis that OT paid Biffa £125,000 (inclusive of interest) plus the costs of the entire proceedings. On 19 June 2008 OT offered to pay Biffa £125,000 but on the basis that costs would remain to be dealt with. OT also said that acceptance of the offer would not affect OT's existing appeal on liability. Biffa responded on 20 June 2008 and offered to accept £125,000 on the basis that costs would remain to be dealt with but also on the basis that OT agreed to withdraw its appeal.
42. On this basis, it is clear that OT decided to base its strategy up to 19 June 2008 on two foundations. First that it had no liability and secondly that Biffa had no recoverable quantum. In doing so, it decided not to engage in any negotiation or make its own Part 36 offers and, by doing so, I do not consider that it can now rely on the fact that Biffa has recovered less than it claimed. If it wanted to do so it should have made a valid Part 36 offer. The truth was that when it finally engaged on quantum in May and June 2007 it took the view that Biffa would recover nil and chose to stand by that position until 19 June 2008.
43. The Part 36 Offers made in June 2008 raised two issues which can, in practice, cause difficulties in settling cases at a late stage. Those issues are costs and appeals. The Part 36 Offer procedure proceeds generally on the basis that automatic costs orders follow on the acceptance of Part 36 offers. Of course, a party can then argue on assessment on the proportionality and reasonableness of the costs incurred. However, a defendant who makes a fully compliant Part 36 offer must do so on the basis that it cannot generally argue that there should be a percentage order for costs or that there should be no order for costs or that it should receive part or the whole of its costs or that some other basis is the appropriate way to deal with costs. In this case the offers were made within the period of 21 days before trial and CPR rule 36.10(4) states that where an offer is made and accepted in that period then, if the parties do not agree liability for costs, the court will make an order as to costs. This would avoid the difficulty in this case and, in any event, the offers show that the parties would, sensibly, have agreed this course.
44. The second outstanding issue was the question of the appeal on liability. Biffa wanted the appeal withdrawn on the basis that it would accept £125,000 with costs dealt with by the court. OT did not want to withdraw the appeal. I consider that, in this respect, the failure to reach agreement cannot be said to represent unreasonable conduct by either party. It was a question, albeit related to the Part 36 procedure, where the parties took two views and it would be impossible to say that either party could or should have accepted the other party's offer. It is also undesirable that the outcome of an appeal should be taken into account in awarding costs, at first instance.
45. In the circumstances, whilst Biffa has recovered more than it offered to accept, it did so on terms which mean that I cannot say that, overall, the outcome was at least as advantageous as the offer Biffa made: CPR 36.14(1)(b).
46. Therefore apart from OT's conduct in failing to engage in any Part 36 process until shortly before the trial on quantum in June 2008, I do not consider that the Part 36 offers give rise to any other consequence or any other conduct relevant to costs.
47. Fourthly, this is a case where, at first blush, the costs incurred by Biffa of over £1million seem disproportionate for a claim where Biffa has only recovered £140,249 plus interest. That however, is not the reality. Biffa faced a trial against two defendants in which all aspects of liability were in issue and where, as against MEH, complex issues of law were involved. But for MEH's insolvency, Biffa would have been able to recover substantial damages from MEH based on an entitlement to liquidated damages of over £290,000 and over €760,000. Equally, as between MEH and Biffa many issues of quantum were in issue and needed to be resolved. The fact that there were two trials obviously increased costs. Equally, Biffa had to disclose much documentation relating to the running of the plant. Having conducted both the liability and the quantum trials, this is not a case where the approach in terms of the amount of effort has been disproportionate, so far as has been evident to the court.
48. Fifthly, this is not a case where it is possible, or either party urges, that an issues based costs order should be made. Given the approach adopted to liability and quantum by OT of no liability and no quantum, I do not consider that picking over the issues to assess success on issues would represent an appropriate approach.

Conclusion

49. In all the circumstances, I have come to the conclusion that it is not appropriate for me to make a different order under CPR rule 44.3(2)(b) and that the appropriate order is that Biffa should have its costs of the action, to be assessed on a standard basis, if not agreed.
50. I have come to this conclusion because Biffa has succeeded both on liability and quantum where OT took, as it was entitled to, the view that it would not move from the position of no liability and no quantum. Having taken that position, OT cannot now say that Biffa has not been the successful party or that OT has had a significant measure of success in relation to costs liability. In terms of quantum, OT did not engage with Biffa or MEH in the Pre-Action Protocol process or on quantum until shortly before the original trial date in July 2007 and did not respond to any attempts by Biffa to settle the matter by the Part 36 procedure. This is a classic case where, if OT wished to protect itself against a position where Biffa recovered less than it claimed but more than OT's figure of zero, it could and should have done so. It cannot now complain that, without intentional exaggeration, Biffa has recovered less than it claimed but more than OT contended for. Biffa's claim was based on a difference between losses and savings so that the ultimate balance depended on the comparative size of those components. None of the figures which made up the losses and savings can be said to have been exaggerated, some losses were less on the evidence and some savings were more. The figure for Biffa's quantum reduced based on the finding of the period of delay and as the evidence developed but I do not consider that Biffa's approach can be said to have been unreasonable or such as to deprive it of an order of costs. Nor do I think that this is a case where a percentage order would be just based either on the sum recovered or on the overall amount of costs incurred.
51. Biffa also seeks an order for a payment on account of costs of the order of £400,000. In my judgment, given the current level of detail of costs and possible challenges by OT, I consider that a lower figure of £300,000 would be appropriate.
52. Subject to any further submissions, I also propose that the costs relating to issues of costs should form part of the costs of the action and follow the order which I have made. I will hear submissions as to any other matters.