Devon County Council v Celtic Bioenergy Ltd

Failure to comply with a costs timetable is a factor in determining costs, but does not justify a reduction where it caused no practical disadvantage and the surrounding circumstances provide a reasonable explanation. Costs incurred through claims consultants are recoverable only by reference to the reasonable costs of work that could properly have been performed by solicitors; rates cannot be justified merely by comparison with London solicitors’ rates. Costs must also be proportionate to the application. Issues pleaded but neither heard nor determined are not thereby dismissed, and their later pursuit is not an abuse of process merely because they appeared in the original proceedings.

The judgment concerned costs and ancillary orders following Devon’s application for declarations concerning an adjudication arising from a contract for the design and construction of an in-vessel composting facility. Ramsey J had previously adjourned an injunction application and directed that the substantive declaration application be heard on 17 January 2014.

That hearing determined the adjudicator’s jurisdiction over most of the matters referred, but time was insufficient to determine claims for statutory interest and the costs of an earlier adjudication. The court therefore had to assess costs for both hearings, determine the net amount payable, and decide whether the unresolved issues had been dismissed or could be raised later.

1. Costs of the earlier hearing. Although Devon had failed to serve a costs schedule within the time required by Civil Procedure Rules 1998, Practice Direction 44, paragraph 9.6, the failure caused no practical disadvantage. The court took it into account but made no deduction. The costs payable for the injunction application were assessed at £8,984.
2. Costs of the substantive hearing. The court applied the principle in NAP Anglia Ltd v Sun-Land Development Co Ltd (No 2) [2012] EWHC 51 (TCC): claims consultants are not entitled to recover more than the reasonable equivalent cost of work properly undertaken by solicitors. The claimed rates were reduced to rates supported by the evidence, and charges for secretarial or overhead work were disallowed.
3. The court considered costs exceeding £60,000 for a short application to be substantially disproportionate. It reduced the solicitors’, consultants’ and counsel’s claims, assessing Celtic’s recoverable costs at £22,001, representing 70% of the reduced total.
4. Unresolved issues. The court declined to apply the abuse-of-process principle relied on from Henderson v Henderson (1843) 3 Hare 100, 114 to issues that had not been heard or decided. Their inclusion in the Statements of Case did not prevent Devon from raising them later if appropriate. The order therefore stated that jurisdiction over Celtic’s claims for statutory interest and costs of Adjudication 7 as damages had not been determined.
5. After setting off the two costs awards, Devon was ordered to pay Celtic £13,017.

The judgment records an earlier hearing before Ramsey J on 20 December 2013 concerning interim relief and directions. No appeal is stated.