Levicom International Holdings BV & Anor v Linklaters (a firm)

In determining costs, the court applies the general rule that the unsuccessful party pays the successful party’s costs, assessed by commercial reality rather than technical analysis. A departure from that rule may be made where the unsuccessful party achieved meaningful success on part of its case or where the successful party’s conduct warrants it. Where negligence and causation are closely connected, a limited admission may not have shortened or materially affected the trial. In such circumstances, a proportionate costs order is preferable to issue-by-issue orders, but no departure from the general rule may be justified.

Following a claim in which Levicom obtained nominal damages and succeeded to some extent in establishing negligence against Linklaters, the court considered the appropriate costs order. Both parties accepted that Linklaters was the successful party in commercial reality and that, if the general rule were departed from, the appropriate order would be payment of a proportion of Linklaters’ costs rather than separate orders on individual issues. The central questions were whether Levicom’s limited success and Linklaters’ conduct justified such a departure, and how any reduction should be assessed.

1. The successful party was Linklaters and the unsuccessful party was Levicom, notwithstanding the award of nominal damages. Success is determined by commercial reality, not technical analysis.
2. The general rule that the unsuccessful party pays the successful party’s costs remained the starting point. If a departure were justified, a proportionate reduction in Linklaters’ recoverable costs would be preferable to discrete orders addressing particular issues or allegations.
3. The court was required to have regard to the conduct of the parties, the extent to which each party succeeded on part of its case, and any payment into court or admissible offer to settle. No payment or offer had been brought to the court’s attention.
4. Levicom’s limited success in establishing negligence did not justify a departure. The nature and extent of the alleged negligence were closely bound up with reliance and causation. A limited admission by Linklaters would not realistically have shortened or materially assisted the central inquiry. Linklaters’ refusal to acknowledge any shortcoming in its advice was not unreasonable in the conduct of the defence, including for the purposes of Civil Procedure Rules 1998, CPR 44.3.5.B.
5. Linklaters was therefore awarded its costs in accordance with the general rule.