Tullett Prebon Plc & Ors v BGC Brokers LP & Ors

After a preliminary liability hearing, the normal course is to reserve costs where a payment into court or Part 36 offer may affect the eventual costs result. The court may make an immediate costs order in an exceptional case, particularly where particular costs have been wasted by the unsuccessful party’s conduct. A costs order should not be made where the court cannot fairly assess the effect of later costs, set-off, offers, or identified shortcomings in the litigation. The determination of costs may therefore be deferred until damages and the overall financial position are known.

The claimants succeeded at trial on liability against the corporate defendants, obtained final injunctive relief, and successfully resisted the Part 20 counterclaim. Their damages claims were to be determined at a later hearing. They sought their costs to date on an indemnity basis, including a substantial payment on account.

The defendants relied on two Calderbank letters offering terms as to injunctive relief and monetary compensation. The court was asked whether costs incurred before the first offer’s effective date should nevertheless be ordered immediately, despite the unresolved damages and costs consequences.

1. Costs after 19 October 2009. It was plainly wrong to make an order for costs incurred after that date, because the court had to assume that the claimants would not do better than the offers and could not yet know their ultimate effect.
2. General principle. Where a party succeeds on liability but a payment into court or Part 36 offer may affect the overall costs result, costs should ordinarily be reserved until damages are determined. This approach was supported by HSS Hire Services Group plc v Builders Merchants Ltd [2005] 3 All E R 486 and Shepherds Investments Ltd v Walters [2007] EWCA Civ 292.
3. Exceptional cases. An immediate order may be made where the circumstances warrant it. Multiplex Constructions (UK) Ltd v Cleveland Bridge (UK) Ltd [2007] EWHC 659 (TCC) illustrated such an exception where particular costs had been wasted by the defendant’s conduct, and a payment on account was justified.
4. The present case did not justify an immediate order. The claimants might ultimately have no net recovery of costs, and the court could not assess the proper reduction arising from matters in which the claimants had failed without knowing the eventual costs position or the contribution of those matters to the litigation.
5. All outstanding costs matters were reserved.

First-instance costs judgment following the court’s earlier liability judgment. The judgment itself does not provide a separate citation for that earlier decision.