AB & Ors v British Coal Corporation (Department of Trade & Industry)

When exercising its discretion on appeal costs, the court must consider all the circumstances, including the parties’ conduct and who achieved the practical result sought. A compromised appeal may still have a successful party for costs purposes where one party obtains the outcome it had pursued throughout. A continuing costs order does not give representatives carte blanche to act unreasonably, but an order requiring payment of the opposing party’s costs will generally require wholly unreasonable conduct or conduct meriting serious criticism. Costs will not ordinarily be ordered against a non-party representative where that would achieve no practical consequence beyond an order against the parties.

The judgment determined four costs issues arising from the British Coal Respiratory Disease Litigation and the assessment of costs under optional risk offer schemes. The Department of Trade and Industry had appealed directions concerning the selection of representative cases. The appeal was compromised after the claimants agreed to the random selection sought by the Department, and the costs issue was remitted to the High Court.

The court also considered costs relating to evidence excluded from reliance, delay in providing evidence by Beresfords, and the UDM’s instruction of a second leading counsel. The central questions were who had achieved the substantive result on the appeal, whether costs should be set off against generic costs payable to the claimant representatives, and whether the challenged conduct justified departing from the continuing costs arrangements.

The court ordered that the Department of Trade and Industry should receive its costs of the compromised appeal, including the application for permission to appeal.

1. Applying the discretion under CPR 44.3, the court considered the practical result. The Department had sought random selection of cases throughout and obtained that result. The compromise avoided delay but did not alter the fact that the Department had achieved its objective. The appeal had a real prospect of success, although its outcome was not assured.
2. The costs order was made against the claimants, by set-off against future generic costs and disbursements payable to the Co-ordinating Group. The Co-ordinating Group and the UDM were non-parties. It was inappropriate to make a wasted costs order against them, and the circumstances were not sufficiently exceptional to justify a non-party costs order. The UDM’s peripheral involvement did not warrant any contribution to the appeal costs.
3. The claimants’ own costs of serving evidence which the court had excluded were not recoverable. The Department’s modest costs connected with challenging that evidence were also refused. Within the continuing costs regime, an order for the opposing party’s costs would generally require conduct that was wholly unreasonable or merited serious criticism; that threshold was not met.
4. The Department’s costs caused by Beresfords’ late and initially inadequate evidence were refused. The difficulties experienced by Beresfords, including the absence of time records and the earlier acceptance of information in the same format, meant that the circumstances did not warrant a costs order.
5. The additional leading counsel instructed by the UDM was a luxury in the circumstances. The Department’s liability for those costs was therefore limited to 20 per cent.

Court of Appeal: The Department appealed directions concerning the selection of representative cases. After permission to appeal was granted, the claimants agreed to random selection and the appeal was dismissed by consent, with the costs issue remitted to the High Court.

High Court (Queen’s Bench Division): The court awarded the Department its appeal costs, refused costs orders concerning the excluded and delayed evidence, declined to impose costs on the UDM, and limited recovery of the second leading counsel’s costs to 20 per cent.