Eurocall Ltd v Energis Communications Ltd & Anor

Costs following an unsuccessful application to strike out a claim or obtain summary judgment are ordinarily assessed on the standard basis unless the conduct or circumstances justify indemnity costs. Proportionality requires consideration of matters including the sums involved, the complexity and importance of the issues, and the parties’ financial positions. The receiving party bears the burden of establishing reasonableness on the standard basis. On summary assessment, the court may reach a broad impression where the costs schedule lacks a detailed task-by-task breakdown.

The claimant and the second defendant sought costs from the first defendant after its applications to strike out the claim or obtain summary judgment on the ground of champerty had failed. The court had previously held that the relevant provision in the amendment agreement was not void for champerty.

The first defendant accepted that costs were payable, but challenged the amount claimed and opposed indemnity costs. The issues included proportionality, reasonableness, the effect of a settlement offer, the use of leading and junior counsel, solicitor attendance, and the adequacy of the costs breakdown.

1. Basis of assessment. The costs incurred before expiry of the claimant’s offer were assessed on the standard basis. The first defendant’s conduct did not justify indemnity costs, and no other feature took the case out of the ordinary. The claimant therefore bore the burden of establishing reasonableness, and proportionality applied.
2. Proportionality and reasonableness. The court considered the sums involved, the complexity and importance of the champerty application, and the fact that success would have ended the claim. The substantial factual and documentary preparation was justified. Item 4 was nevertheless reduced by £5,940 because the summary assessment lacked a detailed breakdown of the time spent on individual tasks.
3. Summary assessment. Where detailed taxation is unavailable, the judge may assess costs by forming a broad impression from the issues and material placed before the court. Several challenges to solicitor and counsel fees were rejected as the amounts were reasonably incurred and proportionate. Some duplicated or excessive attendance costs were reduced.
4. Outcome. The total claimed was £55,395.50. The judgment stated that deductions of £7,590 should be made and that £47,805.50 was recoverable, but its operative order required Energis to pay £47,905.50 to Mr Warr within 14 days of hand-down.

The judgment records that the costs application followed the failure of the first defendant’s applications to strike out the claim or obtain summary judgment. The substantive judgment held that the relevant contractual provision was not void for champerty.