Dover Harbour Board v ISS & Ors

Under CPR 38.6, discontinuance normally attracts an order requiring the claimant to pay the defendant’s costs. The court retains a discretion to depart from that outcome. The claimant bears the burden of showing that the usual order should not be made. Relevant considerations include whether the claim was reasonably brought, substantial changes in circumstances, the proportionality and likely utility of continuing, the defendant’s financial position, and the personal and financial consequences of continued litigation. Where those factors make continuation disproportionate and of little practical benefit, discontinuance may be ordered with no order as to costs.

The claimant brought a complex conspiracy claim against four defendants, including Mr Dobson. After settling with the other principal defendants and receiving an insurance payment, it applied under CPR 38.6 to discontinue against Mr Dobson. It accepted that the claim had been reasonably brought and did not resile from the allegations, but argued that continuing would be disproportionate because Mr Dobson had limited resources and little could realistically be recovered.

Mr Dobson did not oppose discontinuance but sought approximately £17,000 in disbursements and other costs. The issue was whether the usual costs consequence of discontinuance should be displaced.

1. The application to discontinue the claim against Mr Dobson was granted. The court ordered discontinuance with no order as to costs.
2. CPR 38.6 establishes the usual position that a claimant discontinuing proceedings is liable for the defendant’s costs incurred before notice of discontinuance. The rule leaves the court with a discretion to order otherwise.
3. The burden lay on the claimant to justify departure from the usual costs order. The court applied the ordinary principles discussed in Re Walker [2006] 1 All ER 272.
4. The claimant had reasonably brought the claim against Mr Dobson, whose alleged participation was material to the conspiracy case. The court did not determine the truth of the allegations or Mr Dobson’s liability.
5. The settlement and insurance recovery constituted a substantial change of circumstances. Continuing the proceedings would involve enormous costs, while Mr Dobson’s limited resources meant that recovery was likely to be minimal. The court also took account of the serious potential effects of continued litigation on Mr Dobson’s family life, health, well-being and finances.
6. Those factors made discontinuance proportionate and substantially beneficial in the public interest. They discharged the claimant’s burden of showing that the usual costs order should not be made.
7. Permission to appeal was refused. The judge considered that the relevant permission test had not been satisfied and indicated that any renewed application would have to be made to the Court of Appeal.

This was a first-instance decision. Permission to appeal was refused; any renewed application was to be made to the Court of Appeal.