DSM Demolition Limited v O'Driscoll

Where a costs decision appears to have been significantly influenced by a without prejudice letter and an arguable issue arises about material that may be considered apart from CPR Part 36, the appellant should be allowed to put the issue before the full court. Permission may be granted without deciding the merits. Detailed assessment of costs may be stayed pending the appeal or further order.

This was an application for permission to appeal a costs decision of Her Honour Judge Kirkham in the Queen’s Bench Division, Birmingham DR TCC. Judgment had been entered for the claimant in an essentially undisputed sum, while the defendant succeeded on a counterclaim, set-off and some claimed indemnities. The judge awarded the defendant its costs.

The lower judge appeared to have been significantly influenced by a letter dated 3 March 2000 containing proposals. The letter was without prejudice and did not appear expressly to be without prejudice as to costs. The central issue was whether it could be taken into account in the context of CPR Part 36 and material outside Part 36.

Permission to appeal was granted.

1. The application concerned a costs order made after judgment for the claimant on an essentially undisputed sum, with the defendant succeeding on a counterclaim, set-off and certain claimed indemnities.
2. The lower court’s reasoned judgment indicated that it had been influenced to an apparently significant extent by the letter of 3 March 2000. The letter was without prejudice and did not appear expressly to be without prejudice as to costs.
3. The appellant argued that the letter could not lawfully be taken into account. The proposed appeal also raised the broader procedural question, in the context of CPR Part 36, as to what material could be considered apart from material set out in Part 36.
4. Whatever the ultimate merits of that argument, the claimant should be entitled to put it before the full court. Permission to appeal was therefore allowed.
5. Detailed assessment of the defendant’s costs was stayed until the hearing of the appeal or further order. The costs of the permission application were costs in the appeal.

• Court of Appeal (Civil Division): In [2002] EWCA Civ 184, Lord Justice Latham granted permission to appeal and stayed detailed assessment of the defendant’s costs.
• Queen’s Bench Division, Birmingham DR TCC: Her Honour Judge Kirkham awarded judgment for the claimant on an essentially undisputed sum, gave judgment for the defendant on the counterclaim, set-off and certain indemnities, and awarded the defendant its costs on 21 September 2001.