Edginton v Sekhon & Anor

An appellate court will interfere with a costs order only where the first-instance judge has acted outside the permissible range of discretionary decisions. Under the Civil Procedure Rules, Part 44.3, the court must consider all the circumstances, including party conduct and admissible settlement offers, whether or not made under Part 36. A valid offer which is not a Part 36 offer may still justify substantial weight, although it lacks Part 36’s special costs consequences. The court may consider conduct causing or prolonging litigation, including inadequate records, delayed billing, non-disclosure and unpleaded issues. The ordinary costs consequences of discontinuance remain subject to the court’s power to order otherwise.

Mr Edginton appealed against a costs order made by HHJ Plunkett after his claim for professional fees against Mr and Mrs Sekhon was dismissed. The litigation included an abandoned counterclaim and three other proceedings arising from the parties’ solicitor-client relationship. Two were applications under section 70 of the Solicitors Act 1974 to tax bills, and one was a professional-negligence claim. The Sekhons had made a drop-hands settlement offer covering the proceedings. The central issues were whether the judge could depart from the ordinary costs positions by relying on that offer, the parties’ conduct and the discontinued claims, and whether the resulting order fell outside the permissible range of discretion.

1. Appeal dismissed. The costs order was within the permissible bounds of judicial discretion. The appellate question was whether the order was outside the permissible band, not whether the Court of Appeal would have made the same order.

2. Under Civil Procedure Rules, Part 44.3, the unsuccessful party is ordinarily ordered to pay the successful party’s costs, but the court may make a different order after considering all the circumstances. Relevant matters include conduct, partial success and any payment into court or admissible offer to settle, whether or not made under Part 36.

3. The settlement letter was a valid offer to settle, although it was not a Part 36 offer because it set out its own costs consequences. The absence of Part 36 consequences did not prevent the judge from taking the offer into account. Since the appellant had no viable claim for the unpaid fees, the judge was entitled to conclude that he had not done better than the drop-hands offer.

4. The judge was entitled to rely on the appellant’s conduct, including failure to disclose the lease, failure to plead the three-month rent-free period and substantial delay in delivering bills. The ordinary costs position for discontinued proceedings could be displaced in the circumstances.

5. The order was interpreted as refusing the appellant his costs of the counterclaim, rather than awarding the respondents their costs of it. Accordingly, there was no order as to the counterclaim’s costs.

• Court of Appeal (Civil Division): [2012] EWCA Civ 1812 — appeal dismissed.
• Birmingham Civil Justice Centre: HHJ Plunkett dismissed Mr Edginton’s claim for professional fees and made the challenged costs order.