Horth v Thompson

An appellate court should interfere with a costs decision only where the judge erred in principle or reached a decision outside the generous ambit of reasonable disagreement. In litigation involving both a claim and counterclaim, costs following the event is only a starting point. The court must consider all the circumstances and the available alternatives, including an order for a proportion of overall costs. It is not required to reflect the apportionment of liability in the costs order. A conditional fee agreement and its permitted success-fee uplift are relevant features of the litigation, but do not make an otherwise discretionary costs order perverse.

The claimant and defendant were involved in a road traffic collision. The claimant brought a damages claim and the defendant counterclaimed. After trial, liability was apportioned 65 per cent to the defendant and 35 per cent to the claimant. The trial judge gave judgment on both claim and counterclaim and ordered each party to pay the other’s costs, notwithstanding the defendant’s conditional fee agreement and 100 per cent uplift.

The claimant appealed, arguing that the defendant was the net loser and that the costs order involved an error of principle. The central issues were the proper approach to costs in claim-and-counterclaim litigation, the scope of appellate review, and the relevance of the conditional fee arrangement.

1. The appeal was dismissed. The trial judge had not erred in principle, and the order was within the generous ambit of reasonable disagreement.
2. The principles identified in Burchell and Bullard [2005] EWCA Civ 358 applied. Although costs normally follow the event, that is only the starting point. The court retains a wide discretion and must consider all the circumstances, including partial success and the practical alternatives to an issue-by-issue assessment.
3. An order for a proportion of overall costs under CPR 44.3(6)(a) is often a practical alternative to allocating costs between individual issues. That does not mean that proportional liability must be mirrored in the costs order. In a claim and counterclaim, the court may regard the parties’ overall position and the costs broadly incurred by each as more significant.
4. Parkes and Martin [2009] EWCA Civ 883 confirmed that a costs order in analogous road-traffic litigation could fall within the trial judge’s discretion where the same liability issue determined both claims. The present judge was entitled to conclude that the parties’ costs were broadly equal and that the liability apportionment need not be reflected in costs.
5. The conditional fee agreement did not make the order erroneous or perverse. It was permitted by the Rules and the required notices had been served. The court therefore had no need to determine the additional arguments concerning fast-track costs and the interaction of the relevant provisions.

1. High Court (Queen’s Bench Division): allowed the appeal on the costs issue in the judgment under appeal, concluding that the trial judge had fettered his discretion.
2. High Court (Queen’s Bench Division): on appeal, the costs order was restored in substance and the claimant’s appeal was dismissed. The court held that no error of principle or decision outside the reasonable range had been shown.