Shell UK Limited v Anthony Molloy

Permission to appeal may properly be granted where an authority provides a tenable basis for arguing that a costs discretion was exercised on an impermissible basis. The issue may warrant permission where it raises a matter of general public importance, particularly in the context of allegedly fraudulent claims. Granting permission does not determine whether the lower court’s costs order was wrong.

The claimant’s employer admitted liability for a workplace accident. During the assessment of damages, documentary evidence established that the claimant had fraudulently alleged that he had remained off work. He abandoned his claim for loss after returning to employment.

The county court awarded the claimant costs up to the date of a payment made pursuant to Part 36, but awarded the defendant three-quarters of its subsequent costs. The defendant sought permission to appeal, arguing that all costs after the payment should have been awarded to it. The central issue was whether the judge had exercised the costs discretion in a legally permissible manner.

1. Permission granted. The court accepted that the costs order was discretionary, but considered that Bajwa v British Airways Plc [1999] Q152 provided a basis for arguing that the discretion could not properly have been exercised in the manner adopted by the county court.
2. The fraudulent nature of the claim, the resulting complication of the proceedings, and the effect this had on the defendant’s ability to make the payment were matters capable of bearing materially on the costs order. The fact that the payment was slightly less than the damages ultimately awarded did not resolve the issue.
3. The proposed appeal raised a matter of general public importance concerning the approach to costs in litigation involving fraudulent claims. Although the judge had initially taken a different view on the papers, fuller argument justified granting permission.
4. Permission to amend the final ground was refused. The substantive appeal was not determined by this judgment.

• Court of Appeal (Civil Division): Permission to appeal from the Bradford County Court was granted. Permission to amend the final ground was refused.
• Bradford County Court: The claimant was awarded costs up to the date of the Part 36 payment, after which the defendant was awarded three-quarters of its costs.