Burrell v Clifford

Where a claimant succeeds in a modest-value claim, the disparity between the claim’s value and the costs incurred does not, by itself, justify departing from the general rule that costs follow the event. The court should address reasonableness and proportionality through costs budgeting and detailed assessment. A defendant seeking costs protection should make an appropriately framed offer, including reasonable costs incurred to the date of the offer, which remain subject to assessment. The court may consider conduct, the manner in which issues were pursued or defended, and exaggeration, but those factors must be evaluated in the circumstances of the particular case.

The claimant succeeded in a claim against the defendant and was awarded damages of £5,000. The court had previously approved substantial costs budgets for both parties. The defendant relied on a without-prejudice save-as-to-costs offer of £5,000 in damages together with £5,000 inclusive of VAT for the claimant’s costs, contending that the claimant had failed to beat the offer and that the court should depart from the usual costs order.

The central issues were whether the offer gave the defendant adequate costs protection, whether the modest value of the claim and the level of costs justified an adverse or reduced costs order, and what weight should be given to the parties’ other offers and the claim for an injunction.

1. Costs order. The claimant was entitled to his costs of the proceedings. The defendant’s offer matched the damages ultimately awarded but did not adequately cover the claimant’s costs incurred at the date of the offer. The claimant had therefore done better than the offer when the costs element was properly considered, and the offer did not justify a departure from the general rule.
2. Costs protection and proportionality. A party making a without-prejudice save-as-to-costs offer which includes reasonable costs incurred to the date of the offer obtains the protection reasonably available, because those costs remain subject to detailed assessment for reasonableness and proportionality. The existence of a conditional fee agreement, an uplift, and after-the-event insurance costs did not alter that analysis.
3. Value of the claim. The fact that a properly founded claim is modest in value compared with the costs incurred does not, without more, justify depriving the successful claimant of costs, ordering the claimant to pay the defendant’s costs, or imposing a radical reduction in recoverable costs. Costs budgeting and assessment are the appropriate mechanisms for addressing proportionality.
4. Other circumstances. The court considered the claimant’s earlier higher offer, the alleged exaggeration of the claim, the injunction claim, and the parties’ conduct. The injunction claim was considered unsustainable and capable of being struck out separately, but it had not materially increased costs and was given little weight. None of the factors identified under CPR 44.2 warranted departing from the general rule.
5. The defendant’s submissions were rejected and the claimant was awarded his costs of the proceedings.