Brian Warwicker Partnership Plc v Hok International Ltd

Where a contribution is awarded, an interest rate substantially above base rate requires supporting commercial evidence. In the absence of such evidence, a rate closer to base rate is appropriate.

In deciding costs, the court should consider the parties’ real positions, including relevant settlement correspondence, rather than relying only on the pleaded claims. The ordinary rule that costs follow the event may still apply under the modern costs rules. An adverse finding on an issue does not justify a special costs order unless that issue materially caused additional time or expense. Where evidence and issues overlap, the court may properly decline to apportion costs.

The claimant had established an entitlement to recover a contribution from the respondent in related Part 20 proceedings. Two issues remained: the rate of interest payable on the contribution and the costs of the proceedings.

The claimant sought interest at 8 per cent. The respondent contended for 6 per cent and argued that the claimant should not recover all its costs because it had succeeded on only 40 per cent of its pleaded contribution claim and had lost on certain issues. The court considered the parties’ settlement correspondence, the issues litigated, and the extent to which the evidence and costs could properly be separated.

1. Interest. The claimant had provided no evidence that it had borrowed money at 8 per cent or otherwise incurred a commercial loss at that rate. In the absence of further commercial information, an award substantially above base rate was inappropriate. Interest was therefore fixed at 6 per cent, with the calculation and resulting figure to be agreed.
2. Quantitative approach to costs. The court’s discretion under Civil Procedure Rules 1998, Part 44, required consideration of the real position of the parties. Settlement correspondence showed that the claimant’s offers were materially relevant. Although the pleaded claim sought 75 per cent or more and the award was 40 per cent, the quantitative argument did not justify displacing the ordinary rule that costs follow the event where the claimant recovered more than the amount admitted.
3. Issue approach. The respondent relied on two issues on which it had obtained favourable findings. The first concerned the claimant’s delay in admitting its breach of duty. The evidence and cross-examination relied upon were principally directed to apportionment, so that finding did not warrant a special costs order. The second concerned the scope of the claimant’s responsibility. The technical evidence could not fairly be disentangled, and the claimant had succeeded on substantial M&E issues, including the argument concerning the CIBSE table A4.4 methodology.
4. Order. No special costs order was appropriate. The respondent was ordered to pay the claimant’s costs of the Part 20 proceedings on the standard basis, to be assessed if not agreed.