Legal Services Commission v Aaronson & Ors

Where a party succeeds on an appeal concerning a stay, the court may order the opposing party to pay the costs of both the lower-court application and the appeal. In exercising its discretion, the court may consider the parties’ conduct, including the extent to which each party cooperated in resolving the dispute. The possibility of a further appeal does not ordinarily justify withholding an interim payment on account of costs, particularly where substantial costs have been incurred and the successful party has offered a practical resolution.

Following judgment allowing the defendants’ appeal against the Deputy Master’s refusal to stay the claimant’s proceedings, the court heard submissions on costs. The defendants sought their costs before the Deputy Master and on appeal, together with an interim payment. The claimant argued that the defendants’ conduct justified limiting their recoverable costs and opposed an interim payment. The issues were the appropriate costs order and whether an interim payment should be made.

1. The claimant was ordered to pay the defendants’ costs before the Deputy Master and the costs of the appeal. The court considered that both sides had failed to cooperate fully, but the defendants had established their entitlement to the stay while the claimant had consistently resisted it.
2. The possibility that the claimant might seek leave to appeal did not justify withholding an interim payment. In particular, the defendants had offered an expedited audit of their files, which addressed what the claimant could seek to gain by an appeal.
3. The defendants’ substantial expenditure, and the fact that the claimant had required the two-partner firm to incur substantial costs, supported an interim payment. The court ordered payment on account of costs in the sum of £45,000 within 14 days.
4. The parties were invited to submit an agreed order.

The judgment records that the court had previously allowed the defendants’ appeal against the Deputy Master’s refusal to stay the claimant’s claim. The present judgment determined the consequential costs issues. The citation of the earlier decision is not stated in the judgment.