British Nuclear Group Sellafield Ltd v Kernkraftwerk Brokdorf GmbH & Ors

Where litigation involves several issues with materially different outcomes, the court may make a proportionate overall costs order instead of separate issue-based orders. It should estimate the share of the total costs burden attributable to each issue, assess the appropriate costs order for each issue, and apply those assessments by reference to the issue weightings. Costs may be reserved for an issue whose financial consequences remain unresolved.

This was a costs judgment following litigation in which the defendants succeeded on the rigorous technical review issue, while the claimant succeeded on the Magnox prioritisation and wider review issues and on certain construction points. Much of the accounting issue had been compromised, but its largest remaining component had been adjourned.

The court considered whether a proportionate overall order could fairly reflect the parties’ mixed success and the outstanding accounting issue.

1. The court concluded that it was practicable and proportionate to make one overall costs order reflecting the parties’ success on the principal issues.
2. The court estimated the total costs burden by reference to the court timetable. It attributed 68 per cent to the rigorous technical review issue, 22 per cent to the Magnox prioritisation issue and 10 per cent to the accounting issue.
3. Had separate issue-based orders been made, the claimant would have paid 80 per cent of the defendants’ costs of the rigorous technical review issue, because the defendants were wholly successful on that issue. The defendants would have paid all the claimant’s costs of the Magnox prioritisation issue. Costs of the accounting issue would have been reserved because its monetary outcome depended substantially on the adjourned Cogema aspect.
4. Applying those issue weightings produced the overall order that the claimant pay 54.4 per cent of the defendants’ costs to date, while the defendants pay 35.6 per cent of the claimant’s costs to date. Ten per cent of each side’s costs was reserved for the outstanding accounting issue.
5. The court tested the result against a hypothetical total recoverable costs burden of £2 million and considered the resulting allocation fair overall.