BMG (Mansfield) Ltd & Ors v Galliford Try Construction Ltd & Ors

Costs should reflect the parties’ conduct, the proportionality of the costs incurred and the requirements of the overriding objective. Where opposition to an application is disproportionate or over-aggressive, the court may make an adverse costs order, even where the applicant’s own delay or pleading choices contributed to the application. Costs relating to a former expert may be excluded from recovery where the court permits a replacement expert, while costs relating to the replacement expert may ordinarily be costs of the action. Amendments and the costs they cause may be allocated separately according to their nature and the parties’ conduct.

The claim concerned the consequences of a fire occurring about nine years earlier. The claimants applied for permission to instruct a fresh expert, Mr Edwards, and to amend their Particulars of Claim. Some amendments were allowed during the hearing, while judgment was reserved on the remaining matters. The court then invited written submissions on the costs of the applications, including the costs associated with the former expert, Mr Streeter, and the proposed amendments.

The issues were how the application costs should be allocated, whether the claimants should recover the costs of instructing Mr Streeter, how the defendants’ costs of dealing with Mr Streeter’s evidence should be treated, and how the costs of the amendments and Mr Edwards’s evidence should be dealt with.

1. The court made a costs order broadly reflecting its conclusions on the conduct of the parties. Although the claimants were responsible for delay and for pleading the claim in an inappropriate manner, the defendants’ response to the applications was partly ill-judged, generally over-aggressive and disproportionate. That conduct breached the requirements of the overriding objective in its post-1 April 2013 form.

2. It was generally inappropriate to rely on the same breaches of duty against a contractor obliged to achieve a particular standard or result and an architect obliged to exercise reasonable care. The claimants were therefore directed to plead the alleged breaches separately against the two defendants.

3. The allegations of expert shopping were substantially without merit. Nevertheless, the claimants were required to disclose any further reports produced by Mr Streeter after his first disclosed report. The claimants’ costs of instructing Mr Streeter, including the costs of complying with that disclosure order, were not recoverable as costs of the action. The defendants’ costs of dealing with Mr Streeter’s evidence were costs in the case.

4. The costs of incurring and dealing with Mr Edwards’s report were to be costs of the action in the ordinary way, subject to specified historic costs of initial instructions and establishing a Chinese wall, which the claimants were to bear in any event.

5. The defendants were ordered to pay 50% of the claimants’ application costs, in equal shares and on a joint and several basis. The claimants were to bear their own amendment costs, and, subject to the stated exceptions, the defendants’ costs incurred, thrown away or occasioned by the amendments were payable by the claimants in any event. The defendants were also ordered to pay £10,000 on account within 14 days.