Vernon-Kell v Clinch & Anor

Costs in multi-issue litigation remain a matter of judicial discretion. A claimant who succeeds overall may recover costs of the successful claim, but the court may reduce or apportion those costs to reflect an unsuccessful claim. The relevant inquiry is the just overall result, including factual overlap and the additional hearing time caused by the unsuccessful claim. A simple issue-by-issue allocation is not mandatory. The Court of Appeal will not interfere where the trial judge was well placed to assess the issues and the order fell within the range of lawful outcomes. The failure to make an adequate offer may also be relevant.

The claimant pursued a contractual claim for commission and, alternatively, a quantum meruit claim against the defendants. The contractual claim failed, but the quantum meruit claim succeeded against the first defendant for approximately £137,000 plus interest. The deputy judge awarded the claimant his costs, except for days two to five of the contractual trial, and made no separate costs order in favour of the second defendant.

The defendants appealed the costs order, arguing that the costs of the failed contractual claim should have been awarded to them and that the successful second defendant should recover its costs. The central issue was whether the deputy judge had exceeded the permissible scope of his costs discretion.

Lord Justice Schiemann delivered the judgment of the court. Lord Justice Latham and Lord Justice Jonathan Parker agreed. The appeal was dismissed unanimously.

1. The deputy judge was entitled to seek a just overall costs result rather than apply a rigid claim-by-claim allocation. The relevant assessment included the substantial overlap between the contractual and quantum meruit claims and the additional time caused by the unsuccessful contractual claim.
2. The deputy judge considered that the contractual claim had extended the proceedings by approximately two days. It was open to him to achieve the appropriate allocation by denying the claimant the costs of days two to five of the contractual trial, while allowing the costs of the quantum meruit proceedings and the relevant preliminary work.
3. The deputy judge had considered the parties’ conduct, including changes in the claimant’s case and disclosure complaints, but found no sufficient disparity to found a different order. He was also entitled to make no separate costs order for the second defendant, given the shared legal representation and the absence of significant time spent on apportionment issues.
4. The Court of Appeal held that the deputy judge was particularly well placed to evaluate the overlap and the just ultimate result. Neither his method nor the resulting order was outside the range of conclusions lawfully open to him. The claimant had recovered substantially more than the defendants’ offer, and an adequate offer could have avoided the order.
5. The appellants were ordered to pay the respondents’ costs, summarily assessed at £10,647 including VAT.

1. Court of Appeal (Civil Division): The defendants’ appeal against the costs order was dismissed. The appellants were ordered to pay costs summarily assessed at £10,647 including VAT.
2. High Court, Chancery Division: Mr Michael Briggs QC, sitting as a Deputy High Court Judge, awarded the claimant approximately £137,000 plus interest against the first defendant. The claimant received his costs except for days two to five of the contractual trial, and there was no separate costs order in favour of the second defendant.