Rashid v Oil Companies International Marine Forum

Costs remain discretionary even where the damages recovered are substantially less than the amount claimed. A large claim does not, without more, justify disallowing costs or imposing a percentage reduction. The court should consider whether the claim was deliberately exaggerated and whether identifiable costs were wasted or unnecessarily incurred. Where the claimant genuinely believed the claimed loss was recoverable and the unsuccessful elements did not produce quantifiable wasted costs, the usual order may remain appropriate.

Following judgment for Arshad Rashid against the Oil Companies International Marine Forum, with damages assessed at £126,841, the court dealt with ancillary matters. The defendant sought a reduction in the claimant’s costs because the claim had exceeded £1.5 million and included an unsuccessful claim for loss of reputation. The parties also disputed costs arising from applications concerning security for costs, amendment of the claim form, clarification of the trial scope and specific disclosure. The claimant sought permission to appeal, which was refused.

1. General costs. The usual rule was that costs followed the event. Although the damages recovered were less than one tenth of the sum claimed, that disparity did not itself justify departing from the usual order. The court accepted that an exaggerated claim may justify a different costs order, consistently with Widlake v BAA [2009] EWCA Civ 1256, but the issue remained one of discretion.
2. The claimant genuinely believed that the removal of his accreditation had caused the losses pleaded. The claim was not deliberately exaggerated. The court could not identify or quantify costs wasted or thrown away by the unsuccessful damages claim and declined to impose either a specific deduction or an overall percentage reduction. The costs of a witness statement were also not disallowed because it had contributed to the damages awarded.
3. Ancillary applications. The defendant’s security-for-costs application had been pursued on unsustainable grounds, particularly concerning after-the-event insurance. The claimant therefore recovered its costs of defending that application, assessed at £4,000. Costs of the amendment application were left to lie where they fell because the defendant’s concern about the claimant’s address was reasonable. The claimant recovered £2,500 for its application clarifying the trial scope.
4. The claimant was ordered to pay £10,400 for the defendant’s specific-disclosure application. That sum was set off against the claimant’s recovery on the ancillary matters. The defendant was ordered to pay the claimant’s general costs, subject to detailed assessment if not agreed. Permission to appeal was refused.

First-instance decision. The judgment records that damages had previously been awarded to the claimant. The present judgment determined ancillary costs issues and refused permission to appeal.