Secretary of State for Business, Innovation And Skills & Anor v Rangos

In a renewed application for permission to bring a second appeal concerning detailed-assessment costs, the proposed appeal had a real prospect of success and raised a point of principle. Under CPR rules 47.18 and 47.19, an all-in settlement offer must be assessed in its full context. A narrow excess over the offer is not necessarily decisive where the offer includes substantial assessment costs already incurred. It was arguable that reliance on Carver without considering the later guidance in Gibbon, and without accounting for those costs, was inappropriate. Permission was granted, without finally determining the substantive costs appeal.

Mr Rangos had succeeded in earlier proceedings and obtained an order that the Official Receiver pay his trial costs, subject to detailed assessment. The Official Receiver offered £85,000 in full settlement, including interest, VAT and the costs of the detailed assessment. Mr Rangos ultimately exceeded the offer by about £1,176.

The costs judge nevertheless made an adverse costs order, holding that it had been unreasonable to reject the offer. HHJ Cooke upheld that decision on appeal under CPR rules 47.18 and 47.19. Mr Rangos renewed his application for permission to bring a second appeal. The central issue was whether the lower courts had applied the correct approach to the offer, including the significance of the assessment costs and the subsequent decision in Gibbon.

1. Permission granted. Lord Justice Patten held that the proposed appeal had a real prospect of success and raised a point of principle. There was also a compelling reason to grant permission because the lower courts appeared not to have considered a material component of the offer.
2. Under CPR rules 47.18 and 47.19, the receiving party is ordinarily entitled to the costs of detailed assessment, but the court may make another order after considering all the circumstances. Relevant matters include the parties’ conduct, any reduction in the bill, the reasonableness of claiming or disputing particular items, and a written offer to settle the costs of the proceedings giving rise to the assessment.
3. The costs judge was entitled to consider that the offer had been beaten by only a relatively small amount. However, he expressly applied the principles in Carver v BAA Plc [2008] EWCA Civ 412 without referring to the later guidance in Gibbon v Manchester City Council [2010] EWCA Civ 726. It was arguable that reliance on Carver in that manner was inappropriate.
4. The offer was an all-in figure which included more than £20,000 of assessment costs already incurred. Those costs were ultimately assessed at about £10,000. They were highly material to whether rejection of the offer had been unreasonable, and appeared not to have been considered by either court below. Their inclusion also arguably placed the case outside the principles applied in Carver.
5. The order granted permission only. The merits of the costs appeal were not finally determined.

• Court of Appeal (Civil Division): On 22 February 2013, permission to bring a second appeal was granted because the proposed appeal had a real prospect of success, raised a point of principle and involved a compelling reason for permission.
• High Court of Justice, Chancery Division: HHJ Cooke upheld the costs judge’s decision on 24 April 2012.
• Detailed assessment: Master Haworth made the relevant costs order on 24 June 2010.