Aryubi & Anor, R (on the application of) v Birmingham City Council

Costs remain a matter for the court’s discretion, although the usual rule is that the successful party receives its costs. An admissible offer to settle must be taken into account, but it does not determine the order. The court must assess the offer alongside the parties’ conduct, the issues pursued, the timing of the offer and all relevant circumstances. Where the claimant succeeds formally but gains no substantial advantage by continuing after a reasonable settlement offer, the just order may nevertheless be that there be no order as to costs.

The judgment concerned the outstanding issue of costs following a successful judicial review. The claimants had challenged decisions concerning the termination of their market stall licences. The court had held that one challenged decision was unlawful and required it to be quashed.

The defendant relied on an earlier offer to settle the whole claim by providing for a fresh disciplinary hearing. The central issue was the appropriate costs order in light of that offer, the claimants’ formal success, and the parties’ subsequent conduct.

1. The claimants were successful because the decision of 4 April 2014 terminating their market stall licences was unlawful and had to be quashed. The usual costs consequence would therefore have been an order in their favour.
2. Costs were nevertheless discretionary under Civil Procedure Rules 1998, Pt 44. The court had to take into account the defendant’s admissible settlement offer under CPR rule 42.2(4), as stated in the judgment.
3. The offer of 24 July 2014 ought reasonably to have been accepted. In practical terms, the substantive judgment produced the same result as the offer, and the claimants achieved no substantial additional benefit by continuing the proceedings.
4. The court also considered the original challenge to an earlier decision, the defendant’s continued assertion after the offer that the impugned decision was lawful, and the timing of the offer after permission but before detailed grounds were lodged.
5. Considering all relevant circumstances, justice required no order as to costs. Each party was therefore to bear its own costs, avoiding further expenditure on costs assessment.