Aspin v Metric Group Ltd

An appellate court may interfere with a costs order only after concluding that the trial judge’s exercise of discretion was flawed. The starting point under rule 44.3 of the Civil Procedure Rules 1998 is that costs follow the event. Where each party succeeds on distinct issues, the court must consider issue-based orders.

If separate assessment of issue costs would be impracticable, the court should ordinarily make a proportionate costs order. A global order depriving the successful claimant of all costs merely because substantial heads of claim failed does not satisfy that approach.

The claimant brought employment-related proceedings against his former employer. At the liability trial, reported as [2004] EWHC 1265 (QB), he succeeded on wrongful dismissal and parts of his remuneration claim, but failed on several substantial claims. He ultimately recovered more than the defendant’s payment into court.

HHJ Wyn Williams QC awarded the claimant his costs after the liability judgment but made no order for the earlier costs. The claimant appealed from that part of the costs order. The central issue was whether the judge had exercised his discretion in accordance with rule 44.3 of the Civil Procedure Rules 1998.

1. Appeal allowed unanimously. The costs order was set aside insofar as it made no order for the costs incurred up to the liability judgment. The Court of Appeal substituted an order awarding the claimant 50 per cent of those costs and all his costs thereafter.

2. An appellate court does not interfere with a trial judge’s costs discretion merely because it might have made a different order. It must first conclude that the exercise of discretion was flawed. The reasoning and disposition showed that the trial judge had failed to approach the matter as rule 44.3 of the Civil Procedure Rules 1998 required.

3. The general rule is that the unsuccessful party pays the successful party’s costs. The court must nevertheless consider all the circumstances, including each party’s success on particular parts of the case. Failure on reasonably advanced heads of claim does not, by itself, amount to exaggeration of the claim.

4. Where the proceedings contain distinct issues on which the parties have achieved different results, the court must consider different costs orders for those issues. If separate issue-based orders would be impracticable, it should make a proportionate order reflecting the parties’ respective success and avoiding separate assessment of each issue’s costs.

5. The judge’s order was global rather than issue-based. It deprived the claimant of all his earlier costs because he recovered much less than he had claimed, without explaining why the conventional issue-based approach was not adopted.

6. The trial comprised distinct questions concerning contractual remuneration, alleged misconduct and loss of employment prospects. The claimant succeeded on some and failed on others. A 50 per cent award appropriately reflected that mixed success. Although the claimant failed on loss of employment prospects, the defendant should not recover its costs of that issue because it arose from the defendant’s unsupported allegation of gross misconduct.

• Court of Appeal (Civil Division): Allowed the claimant’s appeal from the costs order and substituted an award of 50 per cent of his costs up to the liability judgment, with all costs thereafter.
• High Court, Chancery Division: HHJ Wyn Williams QC assessed damages and subsequently ordered that there be no order for costs up to the liability judgment, with the defendant paying the claimant’s costs thereafter.
• High Court, Queen’s Bench Division: HHJ Price QC determined liability in the claimant’s favour on some issues and against him on others: [2004] EWHC 1265 (QB).