Booth v Britannia Hotels Ltd

On a standard-basis assessment, the court must allow only a reasonable amount for costs reasonably incurred. It must assess the individual items claimed and resolve relevant doubts in favour of the paying party. A percentage reduction may be used only after unjustified expenditure has been identified and the court has checked that the resulting overall award is reasonable in relation to the damages recovered.

A consent order for costs on the standard basis does not curtail that assessment jurisdiction. In the absence of special circumstances, a claimant who knowingly advances an exaggerated or unsustainable damages claim cannot rely on the defendant’s late disclosure of evidence exposing the claim to shift the resulting unreasonable costs to the defendant.

The claimant, a hotel chambermaid, succeeded on liability for a hand injury and later advanced a substantial claim for damages based on reflex sympathetic dystrophy. Shortly before the listed quantum trial, the defendants disclosed surveillance video evidence. The claim settled for £2,500, repayment of recoverable benefits, and the claimant’s costs on the standard basis.

On assessment, District Judge Buckley allowed all liability costs and 60 per cent of quantum costs. Douglas Brown J declined to interfere. The defendants appealed, contending that the assessment should reflect the modest settlement and that the claimant could not attribute the costs of an exaggerated claim to late disclosure of surveillance evidence.

1. Appeal allowed unanimously. Lord Justice Kennedy held, with whom Lord Justice Jonathan Parker and Sir Swinton Thomas agreed, that the district judge’s approach to the standard-basis assessment could not stand.

2. Under Rules of the Supreme Court, Ord 62, r 12, the assessor had to decide which individual costs were reasonably incurred and what amount was reasonable for each. The assessor should first exclude unjustified expenditure, such as costs incurred to substantiate an unsustainable quantum claim. Only afterwards could a percentage or lump-sum technique assist with items that could not readily be separated. The final award had to be reasonable in the round, having regard to the £2,500 damages recovery.

3. The initial 40 per cent reduction deprived the district judge of that necessary overall check. It produced an unsustainable result by treating a substantial proportion of approximately £57,000 expenditure as reasonable to recover £2,500.

4. A consent order for costs on the standard basis required the assessor to work within its terms, but did not remove the powers conferred by Ord 62, r 12. Nor did the defendants’ points of dispute require a premature percentage approach.

5. Lord Justice Kennedy distinguished Ford v GKR Construction Ltd [2000] 1 WLR 1397. Late disclosure of evidence may in an appropriate case justify costs which would otherwise not have been incurred. Here, however, the claimant was to be taken to have known that the claim for reflex sympathetic dystrophy was false. Lord Justice Jonathan Parker added that, absent special circumstances, such a claimant cannot complain that evidence exposing an unsustainable claim should have been disclosed earlier.

6. The case was remitted to District Judge Buckley for reassessment of the claimant’s costs. The defendants received the costs of the appeal and below, subject to the stated set-off arrangements.

• Court of Appeal (Civil Division): appeal allowed in Booth v Britannia Hotels Ltd [2002] EWCA Civ 579; the costs assessment was remitted.
• High Court: Douglas Brown J dismissed the defendants’ appeal from the district judge, declining to interfere with the percentage apportionment.
• Manchester County Court: District Judge Buckley allowed all liability costs and 60 per cent of quantum costs on the standard-basis assessment.