Tribe v Elborne Mitchell LLP (Costs)

Costs following a directions hearing may be awarded immediately where the hearing was in substance a contested application and one party clearly succeeded on the issue argued. The usual order of costs in the claim is not automatic merely because a hearing was listed for directions.

Indemnity costs may be appropriate where a party repeatedly advances substantially the same unsuccessful argument, despite earlier decisions showing that further challenges lack a proper foundation, and the conduct unnecessarily consumes court resources or delays the proceedings. A failure to serve a statement of costs in time should be approached proportionately, beginning with any prejudice caused.

The claimant, a retired solicitor and former member of the defendant law firm, brought claims concerning his closing entitlements, including an account claim and a profit share claim.

At directions hearings concerning the account claim, the court declined to combine it with the forthcoming profit share trial and preferred the claimant’s formulation of the issue to be tried. The claimant then sought the costs of the hearings on the indemnity basis. He also invited the court to revisit part of its March judgment before the order had been drawn up, particularly to make an immediate disclosure order.

The issues were whether the claimant was entitled to rely on a late statement of costs, whether he was the successful party, whether indemnity costs were justified, and whether the March judgment should be revisited.

1. Costs of the hearings. The claimant’s late statement of costs was a breach of CPR Practice Direction 44. The appropriate approach was proportionate. The court first considered whether the breach caused prejudice. Since the defendant had been able to respond to the statement and had identified no relevant prejudice or aggravating factors, the costs were assessed in the normal way, following the guidance in MacDonald v Taree Holdings [2001] 1 Costs L.R. 147.
2. The hearings were in substance contested applications. The parties had taken materially different positions on the formulation of the issue to be tried, and the issue was resolved in favour of the claimant. Applying CPR 44.2, the claimant was the overall successful party and the defendant was ordered to pay his costs.
3. Indemnity basis. The defendant had pursued substantially the same challenge repeatedly and had failed in earlier applications and an appeal. Its continued pursuit of the issue had exhausted significant court resources and delayed the account claim. The conduct and circumstances therefore took the case out of the norm and justified indemnity costs.
4. Assessment. The claimant’s solicitors’ rates, time claimed and counsel’s fees were reasonable in the context of complex financial and employment-law issues. Costs were summarily assessed at £10,852.50 plus VAT, payable within 14 days.
5. Revisiting the March judgment. The court recognised the power to reverse a decision before the order was drawn up and sealed, as stated in Re L (Children) [2013] UKSC 8. That power had to be exercised consistently with the overriding objective. There was no fresh material justifying reconsideration. Reopening the decision would cause further expense, undermine the settlement opportunity created by the existing case-management sequence, and conflict with proportionality, expedition and the public interest in finality. The application to revisit the judgment was refused.