Williams v Jervis (Komatsu)

In determining costs following a costs hearing, the court may take a broad view of the issues to establish where justice lies. A detailed arithmetical comparison between a settlement offer and the outcome is not always necessary or practicable at that stage. The court may consider the substance and generosity of the offer, the issues actually resolved, and the parties’ conduct of the litigation. An offer which omits material aspects of the conduct relied upon for indemnity costs may fail to reflect the true outcome. The court may therefore order the offering party to pay the costs of the hearing despite the offer.

The claimant and defendant disputed responsibility for the costs of a hearing on 23 April 2009 concerning the costs of the underlying litigation. Shortly before that hearing, the defendant offered standard-basis costs generally and indemnity costs for a specified period connected with Dr Gross’s conduct. The claimant rejected the offer. The defendant argued that the claimant had failed to obtain a better outcome and should pay the hearing costs, or that there should be no order as to costs. The issue was whether, viewed broadly, justice required a costs order in the claimant’s favour.

1. The court could not conduct a preliminary assessment of the parties’ costs to determine on a pound-for-pound basis whether the defendant’s offer was better than the outcome. That exercise was for the costs judge and was likely to involve complications.
2. The correct approach was to take a broad view of the issues and determine where justice lay. The defendant’s offer was significant because it abandoned the argument that the claimant should recover only 60 per cent of her costs and offered indemnity costs for part of the relevant period. However, the offer addressed only Dr Gross’s conduct and ignored Mr Hay’s conduct, which was material to the claimant’s application.
3. The defendant’s abandonment of the 60 per cent argument confirmed that the argument had been no more than a litigation tactic. The court also remained concerned that the defendant had not appreciated the seriousness of the conduct of both doctors.
4. Justice required the defendant to pay the claimant’s costs of the 23 April hearing and the subsequent dispute about those costs on the standard basis. The claimant’s costs of the application to adduce further evidence after the close of the parties’ cases were payable by the claimant in any event. Costs attributable to dealing with the evidence of Dr Gross and Mr Hay were to be assessed on the indemnity basis, and the defendant was ordered to pay £150,000 on account of the claimant’s remaining costs.

not stated in the judgment.