Ruta Kerseviciene v Mide Quadri & Anor.

Costs normally follow the event. After an unsuccessful appeal, the usual order is that the unsuccessful party pays the successful party’s costs. The court retains a discretion to make a different order, including to reserve costs, but that discretion must further the overriding objective and be exercised on the material before the court.

A wasted costs application should generally be left until after trial. A later decision by another court will not necessarily assist the appellate court in deciding costs arising from a discrete appeal. In the absence of evidence that the legal representatives acted improperly, unreasonably or negligently in pursuing the appeal, postponing the costs decision is inappropriate.

The judgment concerned costs consequential upon the dismissal of an appeal from an order of HHJ Backhouse refusing to debar the defendants from relying on a witness statement. The substantive appeal had been dismissed, although the appellate court had expressed serious reservations about aspects of the evidence.

The defendants sought to reserve the appeal costs pending a County Court determination of a wasted costs application against the claimants’ solicitors. The issue was whether the court should depart from the usual rule that costs follow the event and postpone determining liability for the appeal costs.

1. Costs discretion. The court held that costs are in its discretion, including both their incidence and the timing of determination. The starting point under CPR 44.2(2) is that the unsuccessful party pays the successful party’s costs, subject to the court’s discretion to make a different order.
2. Application to the appeal. The appeal had been dismissed. The defendants were the successful parties and the claimants the unsuccessful parties. The usual order was therefore that the claimants pay the defendants’ costs.
3. Wasted costs. Personal liability of legal representatives arises under section 51(6) of the Senior Courts Act 1981, with procedural requirements under CPR 46.8 and paragraph 5 of 46PD. A wasted costs order requires improper, unreasonable or negligent conduct, causation of unnecessary or wasted costs, and justice in all the circumstances.
4. Timing and material before the court. Applications for wasted costs are generally best left until after trial. The principle reflected in paragraph 5.2 of 46PD, and the concerns identified in Ridehalgh v Horsefield [1994] Ch 205, include the risk that an early application distracts legal representatives from their clients and drives a division between solicitor and client.
5. The County Court’s future decision would not necessarily illuminate the costs of this discrete appeal, and the High Court would not be bound by it. The material before the court disclosed no improper, unreasonable or negligent conduct in relation to the appeal. The invitation to reserve costs was rejected.
6. Order. The costs of and occasioned by the appeal were ordered to be paid by the claimants to the defendants.

• High Court (King’s Bench Division): Appeal from an order of HHJ Backhouse in the Mayor and City of London Court. The appeal was dismissed, and the claimants were ordered to pay the defendants’ costs.