Summary of Recent Cases – Costs

Recovery of only 20% of CFA and ATE premium in circumstances in which the party was virtually bound to substantially win with no evidence to justify the calculation of risk

Redwing Construction Limited v Charles Wishart, QB,(TCC), 17/01/11

When considering the extent and scope of the recovery of a CFA and ATE in an adjudication enforcement case a 20% rather than 100% uplift was awarded in circumstances in which the Claimant was virtually bound substantially to “win” its Claim, judged at the time when the CFA was entered into. There was little or no chance that the Claimant would actually wholly fail in the proceedings which had been issued. Similarly 20% of the ATE premium was ordered to be paid, there being no evidence from the Claimant as to its reasonableness. Kris Motor Spares Ltd v Fox Williams LLP [2010] EWHC 1008 (QB) considered. A wholly unrealistic assessment of risk had been made to justify the imposition of the premium. That there was no good reason why the Defendant was not notified that a CFA was in place was also taken into account.

Refusal to award indemnity costs in a hard fought case

London Tara Hotel Limited v Kensington Close Hotel Limited (2011), (Ch), 14/01/11

The court was asked to consider whether (i) there should be some disallowance or discount from the Defendant’s costs; (ii) whether two particular periods should be on the standard or indemnity basis; and (iii) whether interest on those costs should run from the date of the order or be postponed to the date of assessment. It was held that though where an issue in litigation can be isolated on which one party was unsuccessful the court may in its discretion chose to make distinct issue based cost order, when considering the issue in this case, the issue was itself introduced into the case by the Claimant and therefore could not justify a discount from the Defendant’s costs. There were not circumstances which justified an award of indemnity costs. A letter which purported to offer settlement on the basis that 10% of the Claimant’s legal fees would be paid could not have Part 36 consequences since it incorporated a costs limitation that was inconsistent with Part 36. When considering an offer made by the Defendant which was far more advantageous to the Claimant than was ultimately awarded, there was nothing exceptional that justified an indemnity costs order. This was a hard fought case and it would not be just to penalise the Claimant by an order for indemnity costs on the basis of an offer of settlement made at a late stage. Interest was postponed until after assessment.

February 22, 2011 · Editorial Team · Comments Closed
Posted in: Cases