Ahmad v London Borough of Brent & Ors

A costs order in favour of a defendant may be enforced by setting it off against costs or damages awarded to a publicly funded claimant in the same proceedings. A costs-against-costs set-off is ordinarily natural and equitable. A costs-against-damages set-off requires an equitable connection between the costs and the damages. Relevant considerations include the relationship between the claims, the ordinary costs consequences of the litigation, public funding, equality between the parties and the saving of public and court resources. The court may determine the issue before trial where the relevant factors are already amenable to assessment.

The claimant brought claims against four defendants arising from his imprisonment and alleged breaches of his rights. The Third Defendant obtained an order striking out substantial parts of the claim and was awarded its costs, subject to assessment. The court adjourned the question whether those costs could be enforced by set-off against any costs or damages later awarded to the claimant.

The principal issue was whether the costs order should contain a Lockley proviso, including whether it was equitable to set the costs incurred in defending the struck-out claims against damages potentially recoverable for a distinct period of alleged false imprisonment.

1. Disposition. The Third Defendant was entitled to enforce the costs order by way of set-off against any award of costs or damages made in favour of the claimant in the proceedings.
2. The court accepted the principle in Lockley that interlocutory costs incurred in the same action may ordinarily be set off against costs recoverable by the claimant. Such a set-off is natural and equitable and does not require the publicly funded claimant to make a direct payment.
3. A set-off against damages is less automatic. It is justified where the costs and damages are sufficiently connected and the set-off is equitable. The two false-imprisonment claims concerned different periods, but together formed part of the claimant’s allegation that his imprisonment was unlawful in its entirety. They were therefore sufficiently closely connected.
4. The factors in CPR, Pt.1.1 were relevant to the assessment of whether a set-off against damages was just and equitable. The set-off could mitigate the claimant’s immunity from ordinary costs consequences, promote equality of footing, save expense and court resources, and avoid further public expenditure where several defendants had already incurred substantial publicly funded costs.
5. The issue was not premature. The court distinguished Morgan v MoJ, where preliminary issues had been tried but were not decisive of liability. Here, a substantial part of the claim had been struck out as unarguable, and the relevant factors could be assessed immediately.

First-instance judgment on the enforcement of a costs order. No appellate history is stated in the judgment.