Daniels v The Commissioner of Police for the Metropolis

Under the Civil Procedure Rules, costs normally follow the event. A successful defendant may be deprived of costs where its conduct was unreasonable, assessed in all the circumstances. Refusal to accept a claimant’s Part 36 offer is not, by itself, sufficient. Refusal to negotiate may justify a different order if unreasonable. Relevant considerations include the merits and the prospects of settlement. A public body may reasonably contest an unfounded claim to deter similar claims. Disproportion between costs and the claim’s value does not alone make its conduct unreasonable.

The claimant, a mounted police officer, sued the Commissioner for damages after being thrown from a horse. Liability was denied, and damages were agreed at £7,000. The claim was dismissed after trial, and the claimant was ordered to pay the defendant’s costs.

The claimant appealed, arguing that the judge had failed to account for the defendant’s late disclosure of a notebook and its refusal to negotiate after rejecting several Part 36 offers. The central issue was whether those matters justified depriving a successful defendant of some or all of its costs under CPR 44.3.

The appeal was dismissed unanimously. Dyson LJ gave the principal judgment, and Ward LJ agreed.

1. CPR 44.3 gives the court discretion as to whether costs are payable, their amount and timing. The general rule is that the unsuccessful party pays the successful party’s costs, but the court may make a different order after considering all the circumstances, including the parties’ conduct.
2. The late disclosure of PC White’s notebook was a material failure to comply with the CPR and could, in principle, support a departure from the general rule. However, the point had not been argued before the trial judge, the failure appeared to result from oversight, and it was not obvious that a costs penalty was warranted. The judge could not reasonably be criticised for omitting it from his assessment.
3. The mere refusal by a successful defendant to accept a claimant’s Part 36 offer cannot, by itself, justify depriving the defendant of costs. The detailed cost consequences provided by Parts 36.20 and 36.21 support that conclusion.
4. A refusal to enter negotiations may be relevant conduct and may justify a different costs order if it was unreasonable. The question depends on all the circumstances. Applying the approach in Halsey v Milton Keynes General NHS Trust [2004] EWCA Civ 576, relevant considerations include the merits of the claim and whether negotiations had a reasonable prospect of success. A party cannot rely on its own obduracy, although the other party’s intransigence may make refusal reasonable.
5. The court should be slow to characterise as unreasonable a public body’s decision to contest a claim it reasonably considers unfounded, particularly where doing so may deter similar claims. Costs disproportionate to the sum claimed do not, without more, establish unreasonable conduct. The trial judge was entitled to conclude that the defendant’s refusal to negotiate was reasonable. The respondent was awarded costs of £4,500.

1. Court of Appeal (Civil Division): Appeal dismissed. The order for the respondent’s costs was upheld, with costs in the appeal fixed at £4,500.
2. Central London County Court: On 9 December 2004, His Honour Judge Collins dismissed the negligence claim and ordered the claimant to pay the defendant’s costs.