Oldcorn & Anor v Southern Water Services Ltd

Under Civil Procedure Rules 1998, r 44.2, the unsuccessful party will ordinarily pay the successful party’s costs. Departure from that rule requires consideration of all the circumstances, including partial success, party conduct and admissible settlement offers.

In a negligence claim, success on duty and breach followed by failure on causation will not normally justify a costs reduction. Duty, breach and causation are components of one claim, rather than separate or distinct issues. Reasonable litigation conduct and a rejected settlement offer may reinforce the application of the general rule.

The claimants brought negligence proceedings against the defendant arising from flooding. In the main judgment, [2017] EWHC 62 (TCC), the claim was dismissed because causation was not established, although the claimants succeeded on duty, breach and several related issues.

This judgment determined the consequential costs dispute. The central issue was whether the claimants’ success on substantial issues, together with alleged defects in the defendant’s conduct, justified departing from the usual order that the unsuccessful party pay the successful party’s costs.

1. The claim was dismissed and the claimants were ordered to pay the defendant’s costs on the standard basis, subject to detailed assessment if not agreed.
2. CPR r 44.2 establishes a general rule that the unsuccessful party pays the successful party’s costs, while giving the court discretion to make a different order after considering all the circumstances. Relevant matters include conduct, partial success and admissible settlement offers.
3. The claimants’ success on duty, the scope of duty, breach and related issues did not justify a departure. The claim was a negligence claim in which causation was an integral component. The issues on which the defendant lost could not properly be treated as separate or distinct issues for costs purposes.
4. The court considered the criticisms of the defendant’s expert evidence, failure to call a witness and other litigation conduct, but concluded that they did not make departure from the general rule appropriate. The approach was materially different from that in Harlequin Property (SVG) Ltd and Another v Wilkins Kennedy (A firm), where failed and only partly successful claims generated distinct costs consequences.
5. The court treated the case as analogous to the personal injury costs approach discussed in Fox v Foundation Piling Ltd. Success on some issues and failure on others in the course of establishing one claim will not ordinarily deprive the successful party of its costs. The defendant’s rejected drop-hands offer was an additional reason for applying the general rule.
6. The court made no final order on the defendant’s proposed £300,000 payment on account of costs without hearing argument on that issue. Short skeleton arguments were invited if the amount was disputed.

First-instance costs judgment following the court’s main judgment in the same proceedings, [2017] EWHC 62 (TCC).