Breyer Group Plc & Ors v Department of Energy And Climate Change

After a trial of preliminary issues, the successful party will ordinarily receive its costs, even though further issues remain for trial. Costs may be reserved where the circumstances justify that course, but reservation is inappropriate where the issues were discrete, were fully contested, and the result makes recovery of value likely. A party need not obtain every finding to be the successful party. Where an unsuccessful issue was substantial, the appropriate response is generally a broad percentage deduction from costs rather than issue-by-issue assessment. The deduction should reflect the importance and scope of the issue lost.

The judgment determined costs following the court’s earlier decision on preliminary issues in [2014] EWHC 2257 (QB). The claimants had established possessions for the purposes of A1P1, interference, justification and causation or loss, but had failed in their claim based on incomplete contracts. The defendant argued that costs should be reserved to the trial judge. The claimants sought their costs of the preliminary issues. The central questions were which party was successful, whether costs should be reserved, and whether the claimants should recover all their costs.

1. The claimants were the successful party. They established possessions under A1P1, interference, and succeeded on justification and causation or loss. Their failure concerning incomplete contracts did not alter that overall conclusion.

2. The general rule under CPR 44.2(2)(a) is that the unsuccessful party pays the successful party’s costs. Following a trial of preliminary issues, the court may make a costs order before the final trial. In the absence of special circumstances, the successful party is likely to receive its costs, although reservation may sometimes be appropriate where the result of later proceedings makes an immediate order premature.

3. Reservation was inappropriate. The preliminary issues were discrete and had been fully contested. The assumed facts did not constitute special circumstances. The findings made recovery of something of value through settlement or further litigation highly likely. Reserving costs would also defer the issue and postpone the defendant’s potential liability to the claimants’ detriment.

4. The claimants were not entitled to all their costs. The incomplete-contracts issue was financially and legally significant, had been advanced on several bases, and had occupied substantial hearing and preparation time. The appropriate reflection of that partial failure was a percentage deduction rather than an issue-by-issue costs order.

5. The claimants were awarded 80% of the costs of, and incurred in connection with, the preliminary issues. The order was to be drawn accordingly.

The judgment concerned costs following the High Court’s preliminary-issues judgment in [2014] EWHC 2257 (QB). It was a first-instance costs decision, not an appeal.