James Miller, instructed by Ben Millns of Keoghs, acted on behalf of the Defendant/Respondent in an interesting costs appeal. The court was concerned with the mechanism for assessing costs following a CPR 36.20(11) settlement in a fixed costs case. There was no deemed costs order under CPR 44.9 so the parties needed a determination from the court.
The Claimant/Appellant applied for a decision to be made without a hearing and suggested directions for a paper assessment within its draft order. However, the court, without a hearing, ordered a detailed assessment in default of agreement. The Defendant subsequently made an application to set the order aside.
At a subsequent hearing, the court amended its original order and provided directions akin to the Claimant’s, ultimately ordering a paper assessment. The court also ordered the Claimant to pay the Defendant’s costs.
The Claimant sought to overturn the decision to award the Defendant its costs of the successful application with a substituted order for “no order as to costs”. It was argued that the decision to award the Defendant costs was wrong because the order made by the Deputy District Judge was“strikingly similar” to the one initially sought by the Claimant.
On the facts, the Claimant argued that the Judge went “wholly wrong” as she “did not balance the various factors in the scale” (Wall v Munday [2018] EWHC 879 (Ch)) in deciding who had actually won. In essence, it was argued that the Claimant was being penalised for having to come to court to achieve something it had previously proposed. The Judge was wrong to base her decision almost entirely on the fact that the Defendant had succeeded in setting the order aside.
In contrast, the Defendant argued that the Deputy had an extremely wide ambit of discretion in determining the incidence and quantum of costs (CPR 44.2(1)). The court should not interfere given that no two judges would determine a costs case in exactly the same way. The Judge had the benefit of hearing detailed submissions at the hearing of the application to set aside the order and there was no error of fact nor law.
Although there was some sympathy for the Claimant, the court would not disturb the order in relation to the costs of the application. The presumption under CPR 44.2(2)(a) that the unsuccessful party should pay the winner’s costs would not be departed from lightly (Fox v Foundation Piling Ltd [2011] EWCA Civ 790) and the appeal was refused.
The appellate court concluded that it would not interfere with the decision even if it may have exercised its discretion differently and it adopted the rationale of Lewison LJ in South Lodge Flats Limited v Malik & Ors [2022] EWCA Civ 411:
[34] “Although the judge’s reasons were very compressed, I do not consider that he erred in principle, took into account matters which should have been left out account, left out of account matters which should have been taken into account; or reached a conclusion which is so plainly wrong that it can be described as perverse…Another judge might have made a different order; and I might have done so myself. But that is beside the point”.
The case serves as a reminder that costs appeals can be difficult to sustain. The appellate court will approach the material facts on the assumption that the Judge had a good reason for making a decision and seldom be as well placed to exercise the discretion afforded under CPR 44.2(1) differently. The principle that “costs follow the event” remains as prevalent as ever.
