Morgan v UPS

A claimant who beats a defendant’s payment into court by only a small amount does not automatically receive, or lose, the costs of the action. The court must exercise its broad discretion by considering all the circumstances, including the parties’ conduct, any exaggeration, the reasonableness of contested issues and their attempts to negotiate.

A trial judge may award the successful claimant all costs where the claimant made realistic counter-offers, adjusted the claim as evidence emerged and the defendant also pursued an issue without merit. An appellate court should interfere with a costs discretion only where the judge misdirected himself or went seriously wrong.

The claimant sustained a wrist injury while employed by UPS. Following a trial on quantum, the Recorder awarded £44,329.12, exceeding UPS’s payment into court by £629.10. The Recorder made substantial findings against the claimant’s credibility but also found that UPS had pursued a medical issue without merit. He ordered UPS to pay the claimant’s costs on the standard basis.

UPS appealed from Southampton County Court, arguing that the Recorder had failed to identify the real winner and had given insufficient weight to the exaggerated claim and narrow margin over the payment. The central issues were whether the Recorder had exercised his costs discretion lawfully and whether the Court of Appeal should interfere with that exercise.

1. Appeal dismissed unanimously. The Recorder was entitled to order UPS to pay the claimant’s costs on the standard basis. His reasons were tenable and his conclusion fell within the broad discretion conferred upon a trial judge in relation to costs.

2. Beating a payment into court is not invariably conclusive. The court must consider all the circumstances, including the parties’ conduct, whether particular allegations were reasonably pursued, any exaggeration by the claimant and the history of settlement negotiations. The Recorder had recognised both the claimant’s untruthfulness and the narrow margin by which the payment was beaten.

3. The case differed materially from Carver v BAA Plc [2008] EWCA Civ 412 and Painting v The University of Oxford [2005] EWCA Civ 161. The claimant’s exaggeration was not the only substantial issue consuming the court’s time. The assessment of damages, particularly loss of earnings, presented genuine difficulty. The claimant had also responded to the video and medical evidence by reducing his claim and making counter-offers which could not be regarded as wholly unreasonable.

4. The Recorder was entitled to take account of UPS’s pursuit of an issue concerning the necessity of an operation. Although his description of that case as wholly without merit was strongly expressed, he could find that UPS had caused costs to be wasted by pursuing it.

5. Applying the approach in Straker v Tudor Rose (a firm) [2007] EWCA Civ 368, appellate interference with a costs discretion requires serious error. The trial judge has a feel for the case which an appellate court cannot replicate. The Recorder had addressed the claimant’s exaggeration and negotiations and had not misdirected himself.

1. Court of Appeal (Civil Division): The appeal against the Recorder’s costs order was dismissed unanimously: [2008] EWCA Civ 1476.
2. Court of Appeal (Civil Division), earlier damages appeal: The appeal against the award of damages was dismissed on 17 April 2008. No citation is stated.
3. Southampton County Court: Mr Recorder Barrie awarded the claimant damages and interest totalling £44,329.12 and ordered UPS to pay the claimant’s costs on the standard basis.