Georgina Partakis-Stevens & Anor v Baljit Sihan & Ors

Under CPR 44.2, the successful party’s costs are the starting point, but the court may make a proportionate reduction for failure on significant issues and unreasonable conduct. A percentage order is appropriate where costs cannot practicably be separated between issues or claims.

Where litigation costs are recoverable as damages for a wrong, and the relevant proceedings were case-managed and costs-managed under the CPR, the ordinary measure is costs recoverable on the standard basis. Indemnity costs require conduct sufficiently outside the ordinary and reasonable conduct of proceedings to justify that order. The same approach applies particularly strongly where the costs were incurred in the same litigation as the claim for damages.

The judgment determined consequential costs issues following the claimants’ successful nuisance claims against the Sihans and the Romeros. The Romeros had also succeeded in claims against the Sihans for misrepresentation, breach of contract and contribution under the Civil Liability (Contribution) Act 1978.

The court considered the appropriate costs orders under section 51 of the Senior Courts Act 1981 and CPR Part 44. It addressed reductions for partial success and conduct, without-prejudice save as to costs offers, indemnity costs, and whether the Romeros’ costs of defending the main action could be recovered as damages. The central issue was the proper basis for assessing those costs.

1. The Stevens were the successful parties. Applying section 51 of the Senior Courts Act 1981 and CPR 44.2(2)(a)CPR 44.2(4) because the Stevens pursued substantially wider remedies and damages than they ultimately obtained and conducted parts of the case unreasonably. The comparable conduct of the Sihans and the Romeros was also considered.

2. A broad percentage order was appropriate. The Stevens recovered 75% of their costs against the Sihans and 50% against the Romeros, subject to the overall cap that they could not recover more than 75% in total. The court rejected the argument that the without-prejudice correspondence showed that the Sihans had acted reasonably while the other parties had unreasonably prevented settlement.

3. The Romeros’ costs of bringing their additional claim could not be awarded as damages. They were recoverable only under section 51 of the Senior Courts Act 1981. Their costs of defending the main action were capable, in principle, of being claimed as damages for the neighbour-dispute misrepresentation.

4. Where costs are claimed as damages for a wrong and arise from civil proceedings subject to case management and costs budgeting, reasonable and reasonably incurred costs should ordinarily be assessed by reference to the standard basis under CPR Part 44. The court emphasised the overriding objective, proportionality, costs budgets and the need to avoid separate, overlapping assessments. This approach applied with particular force where the costs were incurred in the same proceedings.

5. The duty to mitigate meant that even costs claimed as damages for fraudulent misrepresentation were limited to reasonable and reasonably incurred costs, unless the circumstances justified indemnity costs. The Sihans’ conduct did not meet that threshold. The Romeros were therefore awarded 90% of their overall costs, together with an indemnity against their liability for the Stevens’ costs, and an interim payment on account.

First-instance consequential costs judgment following the court’s earlier judgment in the same litigation, [2022] EWHC 3249 (TCC).