Graham Horn & Ors v Charles Joseph Knott & Ors

The court has jurisdiction under its procedural costs powers to determine contributions between parties subject to a joint and several costs order, including on a later application. The assessment is discretionary and may take account of the factors relevant to costs orders, including the parties’ economic interests, legal representation, conduct of the litigation and relative contribution to the issues. Common-law contribution between joint debtors ordinarily requires equal sharing by reference to the number of liable solvent parties and does not permit wider fairness-based reallocation. The procedural costs jurisdiction supersedes any inconsistent common-law contribution claim. The Civil Liability (Contribution) Act 1978 does not apply to costs awarded for proceedings in which damages were neither sought nor ordered.

The applicants were three defendants in proceedings brought by SKAT. The Court of Appeal had allowed SKAT’s appeal against the decision of Andrew Baker J on the Revenue Rule issue and had made joint and several costs orders against several defendant groups and individuals.

SKAT recovered the interim costs payments from the applicants. They sought contributions from the other parties liable under the orders. The respondents disputed the jurisdictional basis of the claim, the applicable method of apportionment, the relevance of common litigation interests and the availability of a stay. The court therefore had to determine the source and scope of the jurisdiction to order contribution and the appropriate allocations.

1. Jurisdiction. The court had power, under its procedural costs jurisdiction including Senior Courts Act 1981 s.51 and CPR 44.2, to determine contributions between parties subject to a joint and several costs order. The jurisdiction was available whether the allocation was made when the original costs order was imposed or on a subsequent application.
2. Relationship with common law. The procedural jurisdiction superseded any inconsistent common-law contribution right. The costs liability arose from a procedural order, and the court’s control of costs in its own proceedings should not be revisited through a different common-law analysis.
3. Relevant factors. In exercising the procedural jurisdiction, the court could consider the factors identified in CPR 44.2(4) and (5), together with other relevant costs considerations. These included the parties’ common economic interest, use of the same legal team, the centrality of their roles, the work undertaken and the efficient conduct of the litigation. The court had to act pragmatically and consistently with the reasons for which the joint and several order was made.
4. Common-law contribution. If the claim were analysed at common law or in equity, contribution between joint debtors with co-extensive liability would ordinarily be equal and several, subject to the number of solvent debtors and any agreement. Wider considerations such as causative potency, moral blameworthiness, benefit or litigation alignment were not applicable to that common-law analysis.
5. Statutory contribution. The Civil Liability (Contribution) Act 1978 did not apply because the costs orders concerned proceedings in which damages were not sought or ordered and no damages claim had been settled.
6. Application and orders. The court apportioned the liabilities by percentages between the defendant groups, reflecting their roles in the litigation and their contributions to the Revenue Rule arguments. The allocations were 45.1%, 30%, 15% and 3.33% each for the proceedings before Andrew Baker J, and 44%, 28.33%, 14.33% and 13.33% for the Court of Appeal costs. Mr Murphy was entitled to apply under CPR 23.10 to set aside the order against him within seven days, and execution against him was stayed pending that opportunity.

The judgment concerned a contribution application following costs orders made in earlier proceedings. The Court of Appeal had allowed SKAT’s appeal against Andrew Baker J’s decision on the Revenue Rule issue on 7 March 2022. This court determined the contributions between the parties liable under the Court of Appeal’s joint and several costs orders.