AXA Sunlife Services Plc v Campbell Martin Ltd & Ors

In commercial litigation, costs are determined by the parties’ success on the issues and the commercial context. The approach sometimes adopted in public-law litigation—requiring a substantial defendant to bear all parties’ costs or to forgo its own costs on issues on which it succeeds—does not apply merely because one party is larger or its standard contract is in issue. Where the appellate result alters the basis on which trial costs were ordered, the lower order should be set aside and replaced with an order reflecting the proportionate outcome.

Four related appeals by AXA Sunlife Services Plc arose from preliminary issue proceedings in the High Court before HH Judge Graham Jones, sitting as a Deputy High Court Judge. The Court of Appeal had delivered its substantive judgment on 18 February 2011, in which both AXA and the respondents succeeded on some issues. Costs issues remained outstanding.

The court considered the appropriate costs orders for the appeal and for the preliminary issue trial. It also considered whether AXA’s greater size, and the fact that its standard contract was in issue, affected the costs analysis.

1. Disposition. The court made no order for costs of the appeal. The costs orders made below, requiring AXA to pay the respondents’ costs, were set aside.
2. Commercial context. The claims arose from commercial relations. That context differed materially from public-law cases in which a substantial defendant may be required to bear all parties’ costs or be deprived of its own costs on issues on which it succeeds. The public-law approach was therefore not appropriate here.
3. Relevant considerations. The fact that AXA was a larger organisation than the respondents did not affect the costs issues. Nor did the fact that AXA’s standard contract was in issue. The outcome had to reflect the parties’ respective success on the issues.
4. Trial costs. The order below was replaced by an order that AXA pay 35 per cent of the respondents’ costs of and occasioned by the trial of the preliminary issues before HH Judge Graham Jones. Those costs were to be determined by detailed assessment on the standard basis in default of agreement.
5. Repayment. If AXA had paid more than 35 per cent, the respondents were required to repay the excess within 14 days after it was quantified by agreement or assessment. Where any costs had already been quantified, repayment was due within 14 days of the order.

• Court of Appeal (Civil Division): determined the outstanding costs issues following its substantive judgment of 18 February 2011 and varied the costs orders.
• High Court of Justice, Queen’s Bench Division, Bristol District Registry Mercantile List: HH Judge Graham Jones ordered AXA to pay the respondents’ costs. The citation of that decision was not stated in the judgment.