Pearce v Lloyds TSB Bank Plc

An appellate court should respect a trial judge’s discretionary costs order where the judge has considered the parties’ relative success and the conduct of the proceedings. Intervention is not justified merely because another costs order might have been available. An order requiring a defendant to pay 60% of the claimant’s costs was within the proper ambit of discretion and was not excessive.

The claimant’s proceedings in the Birmingham District Registry, Mercantile List, resulted in an order under which the defendant bank was to pay 60% of the claimant’s costs, subject to the claimant’s expert costs being disallowed. The bank applied for permission to appeal, contending that the costs order did not reflect the substantive findings and that the claimant should instead pay the costs of the claim, with no order as to the counterclaim. The central issue was whether the judge had exceeded the proper ambit of her discretion.

1. Application refused. The Court of Appeal unanimously refused the bank’s application for permission to appeal against the costs order. The bank was ordered to receive 90% of the costs of the appeal.
2. The costs order was discretionary. The appellate court would not interfere where the trial judge had acted within the proper ambit of that discretion.
3. The judge had explained why she regarded the claimant as the overall winner while allowing for the points on which the bank had succeeded. She had also considered the conduct and course of the proceedings.
4. In particular, the bank had not simply accepted the claimant’s change-of-position case while seeking repayment of the overdrawn account. It had challenged the claimant’s right to rely on change of position at all, making examination of the evidence necessary.
5. In light of the judge’s fuller knowledge of the proceedings, it could not be said that requiring the bank to pay 60% of the claimant’s costs was excessive or outside the proper exercise of discretion.

• Court of Appeal (Civil Division): Refused the bank’s application for permission to appeal against the costs order.
• Birmingham District Registry, Mercantile List: Her Honour Judge Caroline Alton ordered the bank to pay 60% of the claimant’s costs, subject to the claimant’s expert costs being disallowed.