Lovell Partnerships Ltd & Anor v Merton Priory Homes

Where a successful claimant’s conduct has unnecessarily or unreasonably increased the costs of proceedings, the court may reduce the costs recoverable, taking account of both the claimant’s unnecessary expenditure and additional costs incurred by the defendant. The reduction should be proportionate and reflect the court’s assessment of the actual effect of the conduct. Permission to appeal should be refused where the proposed appeal has no realistic prospect of success and there is no other compelling reason for an appeal.

This was a costs judgment following the court’s earlier decision in proceedings brought by Lovell Partnerships Limited and Connaught Partnerships Ltd against Merton Priory Homes. The defendant accepted liability for the claimants’ reasonable costs but argued that the claimants’ conduct had increased costs on both sides.

The complaints concerned alleged non-compliance with the protocol, delay in issuing proceedings, and refusal to give an undertaking in respect of any costs order. The court was required to determine the appropriate costs recovery and the defendant’s application for permission to appeal.

1. The defendant accepted that it should pay the claimants’ reasonable costs. The complaint concerning protocol compliance had little substance: the claimants’ position had been stated sufficiently clearly and the refinement of their argument during oral submissions had not materially altered its thrust.
2. The delay in issuing proceedings was unreasonable. The claimants knew the substance of their claim by the end of 2010 but did not issue proceedings until March 2014. This required both parties’ solicitors to review several years of correspondence and had increased costs.
3. The refusal to give an undertaking to meet any costs order also had some adverse cost effect, although the issue was live for only about a month and the additional cost was limited.
4. The court assessed the claimants’ costs at slightly over £55,000. It considered that costs incurred by both parties should have been lower, but that the defendant had overstated the effect of the matters relied upon. The claimants were therefore awarded £45,000, representing a proportionate amount after a modest reduction.
5. The sum was to be paid to the claimants’ solicitors within 14 days of the judgment. Permission to appeal was refused because the defendant’s proposed appeal had no realistic prospect of success and no other reason had been shown for granting permission. The time for applying to the Court of Appeal was extended to 14 days from hand-down.