Barr & Ors v Biffa Waste Services Ltd [No 4]

The unsuccessful party will ordinarily pay the successful party’s costs. Departure from that rule requires conduct materially connected with the costs of the litigation. Conduct occurring before proceedings is relevant only where it bears on costs incurred in the proceedings. A substantial departure requires conduct of an extraordinary character which pervades the litigation.

Indemnity costs require unreasonable conduct to a high degree, taking the case out of the norm. Refusal of a reasonable settlement offer may justify indemnity costs when viewed with the claimant’s wider conduct and the point at which the claim became unsustainable. An interim payment on account should be set at a sum the court is confident will be recovered on assessment.

The judgment concerned consequential matters following the court’s principal judgment in [2011] EWHC 1003 (TCC), in which the lead claimants’ nuisance claims concerning the Westmill 2 landfill site had substantially failed. The claimants sought an extension of time to appeal and argued that the defendant should receive no costs, or reduced costs, because of its conduct.

The defendant sought its costs without reduction, indemnity costs from 1 October 2010, and an interim payment on account. The issues were whether permission or an extension should be granted, which party was successful, whether the claimants’ conduct justified a departure from the standard basis, and what interim payment was appropriate.

1. The application for an extension of time to file an appellant’s notice was refused. The policy underlying CPR 52 favoured speed and finality. The claimants had been given advance notice of the draft judgment but had not used the opportunity to consider an appeal. The judge stated that permission to appeal would also have been refused: the legal point had no realistic prospect of success, and the factual threshold findings were difficult to dislodge, particularly where the claimants had made no submissions on threshold.

2. The defendant was the successful party. Under CPR 44.3, the general rule was that the unsuccessful party should pay the successful party’s costs. The defendant’s pre-litigation dealings with the Environment Agency were largely background and did not affect the costs of the litigation. Criticism sufficient to deprive a successful party of its costs would need to be extraordinary and pervasive. That threshold was not met.

3. The defendant’s aggressive cross-examination did not justify a reduction. It was, in the round, efficient, produced important evidence and did not lengthen the trial. The defendant’s detailed factual analysis and documentary schedules had materially assisted the court. The failed statutory-authority defence did not justify issue-based costs because the same legislation was relevant to, and supported, the successful reasonable-user defence.

4. Indemnity costs were appropriate from 1 October 2010. Pursuing negligence and nuisance claims in 2009 and early 2010 was not unreasonable to the required degree. After the negligence allegations were abandoned, however, the claimants ought to have recognised that the remaining nuisance claims faced decisive legal and factual difficulties. Their refusal of the renewed Part 36 offer and failure to engage with those difficulties amounted to unreasonable conduct to a high degree and conduct out of the norm.

5. The claimants were ordered to pay 100% of the defendant’s costs on the standard basis, save that costs from 1 October 2010 were to be assessed on the indemnity basis. An interim payment of £1.9 million was ordered, payable within 28 days.

The judgment dealt with consequential matters following the principal first-instance judgment in [2011] EWHC 1003 (TCC). No appeal was determined in this judgment.