Thomas Brown Estates Ltd v Hunters Partners Ltd

Under Civil Procedure Rules 1998, r 44.3, the court must identify the successful party by considering the litigation as a whole and applying common sense to the real outcome in a realistic and commercially sensible way. The general rule that costs follow the event remains the starting point, but the court retains a broad discretion to make a different order having regard to all the circumstances, including party conduct. A party may be successful without obtaining a formal declaration or order where the litigation directly secures the substantive result sought.

The claimant brought proceedings under CPR Part 8 concerning its right to continue using the trade name “Bairstow Eves Countrywide” and sought three declarations. During the hearing, the defendant changed position following an agreement involving Countrywide and confirmed that it would neither require the claimant to cease using the name nor require rebranding. The claimant withdrew its claims for the second and third declarations, and the court declined to grant the first declaration.

The parties disputed costs. The claimant argued that it had achieved the practical result sought; the defendant argued that it was the successful party because no declaration had been obtained, and relied on the claimant’s conduct and the costs associated with the withdrawn declarations.

1. The general rule under Civil Procedure Rules 1998, r 44.3, is that costs follow the event, but the court must first identify the successful party by looking at the litigation as a whole. Success is assessed as a matter of common sense and in a realistic and commercially sensible way.
2. The claimant was the successful party. Although it obtained no formal declaration, the defendant’s change of position secured the claimant’s substantive objective: continued use of the trade name. That result was the direct consequence of issuing and pursuing the proceedings.
3. The court retained discretion under CPR 44.3(2)(b), having regard to all the circumstances, including the matters identified in CPR 44.3(4). It rejected the proposed deduction for the second and third declarations. The court had not determined those issues, and it was inappropriate to decide them retrospectively for costs where the claimant had not had a proper opportunity to respond and the issues were not critical to the costs decision.
4. The claimant’s conduct did not justify departure from the general rule. The claimant had been willing to negotiate subject to clarification of important issues. Nor did the alleged failure to mediate under clause 35.4 justify a different order, since the defendant did not timely seek to enforce the mediation provision and the mediation ultimately failed.
5. The claimant’s costs were summarily assessed at £65,000 including VAT. The defendant was ordered to pay that sum within 14 days, by 4 pm on 31 January 2012.