St Albans Girls' School & Anor v Neary

Although costs ordinarily follow the event in the Court of Appeal, the court retains a discretion to make no order where the circumstances make a costs order unjust. Relevant considerations include whether the unsuccessful party was drawn into a costs-bearing appellate jurisdiction after litigating in cost-free jurisdictions, whether that party was reasonably justified in pursuing the appeal, and whether enforcement would be disproportionate because of impecuniosity. Conduct should be considered only where it has affected costs. If an order is made, recoverable costs may exclude unnecessary duplication of counsel and fees which, although not excessive, exceed what the opposing party should reasonably be expected to pay.

Mr Neary began proceedings in a cost-free jurisdiction and lost. He succeeded in the Employment Appeal Tribunal, also a cost-free jurisdiction. The appellants brought the matter to the Court of Appeal to challenge the developing line of EAT authority. The Court of Appeal allowed the substantive appeal. This judgment concerned the appellants’ application for costs following that success. Mr Neary opposed the application, relying on the circumstances in which he had been brought into a costs-bearing jurisdiction, his reasonable reliance on the EAT authorities, his conduct, and his impecuniosity.

The Court of Appeal made no order as to costs, despite having allowed the substantive appeal.

1. The usual rule in the Court of Appeal is that costs follow the event. That rule does not remove the court’s discretion to make a different order where the particular circumstances justify it. Mr Neary had litigated initially in a cost-free jurisdiction, succeeded in the EAT when the relevant EAT authority supported his position, and was then brought against his will into a costs-bearing jurisdiction because the appellants wished to overturn that line of authority. It would have been harsh to require him to abandon the case merely to avoid costs.
2. The Court accepted that conduct may be relevant to costs, but held that only conduct affecting costs should be taken into account. Mr Neary’s bad conduct had not increased the costs and therefore did not justify an order.
3. The Court accepted that Mr Neary was impecunious. It would have been unrealistic to make a substantial order where enforcement would require a disproportionate expenditure of time and money. That consideration supported making no order.
4. Alternatively, had an order been made, it would not have covered the whole sum claimed. The Court considered that there was no justification for instructing two counsel and that the fees charged by one counsel, while not excessive, were more than an opponent should reasonably be expected to pay. The hypothetical order would have been £5,000 inclusive of VAT.

1. Court of Appeal (Civil Division): Allowed the substantive appeal. On the subsequent costs application, made no order as to costs.
2. Employment Appeal Tribunal: Mr Neary succeeded in the cost-free appellate jurisdiction.
3. Earlier proceedings: Mr Neary had lost in an initial cost-free jurisdiction.