Braganza v BP Shipping Ltd & Anor

When a claimant succeeds on one cause of action but fails on another, the court may make a proportionate costs order reflecting the issues pursued, the conduct of the parties and settlement offers. The general rule that the unsuccessful party pays the successful party’s costs remains subject to the court’s discretion under the Civil Procedure Rules 1998. A withdrawn offer may still be relevant to costs. Where separate allocation of costs would create further complexity and expense, the court may make a single percentage order. The unsuccessful pursuit of an additional and substantially enlarging claim may justify a significant deduction from the successful claimant’s costs, together with an allowance for the defendant’s legitimate costs position.

The claimant brought contractual and tortious claims against the defendants arising from the death of her husband. The contractual claim succeeded in the sum of US$230,256, with interest. The claim under the Fatal Accidents Act 1976 failed.

The court had previously given judgment on the merits and reserved costs. It considered the parties’ conduct, the substantial costs generated by the failed tort claim, and several settlement offers, including offers made under or outside Part 36. The central issue was the appropriate proportion of the claimant’s costs payable by the defendants and whether an interim payment should be ordered.

1. The claimant succeeded on the contractual claim but failed on the tort claim. The defendants were ordered to pay 45% of the claimant’s costs, to be assessed on the standard basis if not agreed, and to make an interim payment of £175,000.

2. Under CPR 44.3(2) and (4), the general rule that the unsuccessful party pays the successful party’s costs is subject to the court’s consideration of conduct, partial success and settlement offers, whether or not made under Part 36. The court must exercise that discretion in a manner that fairly reflects the litigation as a whole.

3. The offer of 25 March 2011 was not a successful offer because it omitted interest. It nevertheless demonstrated a willingness to settle on the basis of the contractual liability later found by the court. Its withdrawal did not prevent it from being taken into account: see Samco Europe [2011] EWHC 1656, at paragraphs 24–26.

4. The failed tort claim introduced a further cause of action, considerably increased the length and cost of the trial, and involved issues on which the claimant failed entirely. The court considered that 40% of the costs should be attributed to that claim. It declined to make separate issue-based or notional-trial orders because allocation would be difficult and would generate further costs.

5. Taking account also of the defendants’ willingness to pay the contractual principal and the claimant’s unwillingness to negotiate on that basis, a further deduction was appropriate. The claimant’s unusually high and apparently disproportionate costs justified caution in fixing the interim payment. On the available evidence, £175,000 was a sum the claimant could confidently be expected to recover on detailed assessment.