Civilians v Ministry of Defence

A successful party does not automatically lose costs because it failed on particular issues. The court should assess whether the unsuccessful issues were major, consumed substantial time and costs, and were important to the proceedings. A broad percentage reduction may be preferable to an issue-based order where detailed apportionment would be artificial or impracticable.

In lead litigation, the wider significance of the cases may be relevant to proportionality. A final order cannot ordinarily be varied merely to create an appeal on an academic issue. The Court of Appeal’s jurisdiction under the Senior Courts Act 1981 extends to judgments or orders, not freestanding reasons which had no effect on the result.

Four Iraqi civilian lead claims against the Ministry of Defence had resulted in judgments for substantial damages. The claimants succeeded under the Human Rights Act 1998, but their tort claims failed as time-barred. The court had also rejected the defendant’s reliance on Crown act of state in relation to the tort claims.

The claimants sought their costs, interim payments on account, and directions for the continuation of the wider litigation. The defendant sought reductions for issues on which the claimants had failed and permission to appeal conclusions concerning Crown act of state. The central questions were the appropriate costs orders and whether an appeal could be created by subsequently varying the sealed final orders.

1. Costs. The claimants were the successful parties and the general rule was that the defendant should pay their costs. There was no automatic requirement to reduce costs because a successful party had lost on one or more issues. The appropriate approach was to identify major issues which had occupied substantial time and cost and on which the overall winner had failed, rather than conduct a mechanistic balance-sheet exercise.
2. The failure of the tort claims justified a 15 per cent reduction in the costs of Alseran and Al-Waheed. In MRE and KSU, the further failure to prove that the capturing and detaining forces were British justified a broader reduction. Because an issue-based order would involve arbitrary and difficult apportionment, the appropriate order was payment of 50 per cent of their individual costs.
3. In assessing proportionality, the costs judge should take account of the fact that the claims were lead cases intended to assist resolution of approximately 600 further claims, their exceptional legal and factual complexity, the difficulty of obtaining evidence from Iraq, and the sensitive nature of the evidence. The defendant’s costs were not a useful comparator. Costs incurred for a party’s own benefit should be distinguished from costs fairly recoverable from the opponent, applying the distinction identified in Kazakhstan Kagazy Plc v Zhunus [2015] EWHC 404 (Comm).
4. An interim payment could properly be made despite skeletal schedules, because they gave a broad indication of the costs and the judge could apply his impression of the work undertaken. A conservative calculation produced an interim payment of £2.5 million.
5. Under section 16 of the Senior Courts Act 1981, an appeal lies from a judgment or order, meaning the final order after trial, not merely from the reasons for that order. Since Crown act of state had no effect on the successful Human Rights Act claims or the final outcome, the proposed appeal was not within the Court of Appeal’s jurisdiction.
6. The sealed order could not be varied under CPR 40.12 because omission of a declaration was not an accidental slip. Nor did CPR 3.17 apply: the circumstances summarised in Tibbles v SIG Plc [2012] EWCA Civ 518, including a material change of circumstances or misstatement of the facts, were absent. The request for a declaration was unpleaded, inappropriate for these personal injury claims, and designed only to facilitate an academic appeal. Permission to appeal was refused.

The judgment records that final orders were made on 14 December 2017 after four lead trials. The defendant sought permission to appeal conclusions on Crown act of state, but the application was refused because the proposed appeal was not from a judgment or order with operative effect.