Abbott v Long

A trial judge has a wide discretion under rule 44.3 of the Civil Procedure Rules 1998 when deciding costs. Although the party recovering damages is ordinarily the successful party, the court may make no order for costs after considering all the circumstances, including partial success, the absence of a settlement offer, an exaggerated claim and the manner in which litigation was pursued.

A successful party may be deprived of costs to mark disapproval of blameworthy litigation conduct, even where that conduct caused no significant additional costs. Any such sanction must be proportionate. An appellate court will interfere with a costs order only for an error of principle or perversity.

Following a road traffic collision, Abbott recovered damages from Long, subject to a 75% reduction for contributory negligence. Abbott claimed about £48,000 for credit hire after his vehicle was written off. During the trial he accepted that he could have financed a replacement vehicle, reducing the recoverable hire period to six months and the hire recovery to £8,600.

HHJ Marshall QC, sitting in the Central London County Court, made no order as to costs. She found that the credit-hire claim had been grossly exaggerated and pursued in a commercially driven manner without proper regard to mitigation. Abbott appealed, contending that he was the successful party and should have received his costs.

1. Appeal dismissed. Arden LJ, with whom Patten and Sullivan LJJ agreed, held that Abbott had not shown that the judge had erred in principle or reached a perverse conclusion. A costs appeal carries a heavy burden because the trial judge has a feel for the case which an appellate court cannot replicate.

2. Rule 44.3 of the Civil Procedure Rules 1998 made Abbott’s success in recovering damages the ordinary starting point, but not the end of the inquiry. The judge was required to consider all the circumstances. Those included the absence of an offer from Long, Long’s substantial success on liability and credit hire, and Abbott’s pursuit of a grossly inflated hire claim.

3. The judge was entitled to find that the conduct went beyond a forensic misjudgment. Although it did not amount to dishonesty, the claim had been pursued by a serial credit-hire litigant in a commercially driven and blameworthy way, without adequate scrutiny of mitigation or the proper level of expense. That finding was not challenged on appeal.

4. A court has jurisdiction to disallow costs as a proportionate response to reprehensible conduct even where the conduct has not caused significant wasted costs. The judge had weighed the relevant factors and had disallowed only a proportion of the costs otherwise recoverable. Her order was not disproportionate.

5. There is no general rule that contributory negligence can never justify a reduction in costs. It depends on the facts. Here that issue caused no distinct costs and could have justified only a minimal reduction; the decisive considerations were the inflated credit-hire claim and the conduct of the litigation.

• Court of Appeal (Civil Division) — Abbott’s appeal was dismissed: [2011] EWCA Civ 874 .
• Central London County Court (HHJ Marshall QC) — by order dated 11 August 2010, after awarding Abbott damages reduced by 75% for contributory negligence, the judge made no order as to costs.