Various Claimants v WM Morrison Supermarkets Plc

Costs remain discretionary. The starting point is that the successful party should recover its costs, but the court must consider all the circumstances, including partial success, conduct, the relative importance of issues and the extent to which costs overlap. An issues-based order should be approached with caution because of the difficulty and expense of later assessment. A proportionate percentage order may better reflect the parties’ relative success. In determining the percentage, the court should distinguish costs specific to issues on which a party lost from common costs properly attributable to issues on which it succeeded.

The claimants succeeded overall in group litigation concerning the disclosure of employee data. Their direct liability claims failed, but their claim that the defendant was vicariously liable for an employee’s conduct succeeded. The court had granted permission to appeal on vicarious liability, but the application concerned costs of the action following the first-instance judgment.

The defendant sought a substantial reduction, contending that the direct liability issues had occupied most of the litigation. The claimants accepted that a proportionate order might be appropriate but maintained that much of the expenditure was common to both aspects of the claim. The issue was the proper costs order under CPR 44.2.

1. The claimants were the overall winners because they obtained a finding of liability. The general rule that the successful party is entitled to its costs was therefore the starting point.

2. Under CPR 44.2, the discretion was broad and required consideration of all the circumstances, including partial success, the parties’ conduct, the reasonableness of pursuing particular issues, and the manner in which the case was conducted. The court also had regard to the guidance in English v Emery Reimbold and Strick Ltd [2002] 1 WLR 2409, including the caution against issues-based costs orders, and the principles summarised in Multiplex Constructions (UK) Ltd v Cleveland Bridge UK Ltd [2008] EWHC 2280 (TCC).

3. The direct and vicarious liability cases were substantially distinct, although they had some common factual and evidential material. The direct liability case involved 13 of the 14 identified issues, extensive pleadings, disclosure and most of the trial time. The vicarious liability case involved one principal issue.

4. The claimants had pursued several tenuous direct liability arguments at unnecessary length. It was reasonable to reflect the defendant’s success on those issues, but a net costs order or an order that each party bear its own costs would disregard the claimants’ overall success and the common costs relevant to establishing vicarious liability.

5. The proper order was that the defendant pay 40% of the claimants’ costs of the action, to be assessed if not agreed.

This was a first-instance costs judgment following the court’s earlier decision on liability. Permission to appeal had been granted on vicarious liability, but no appeal determination was recorded in this judgment.