Hope Capital Limited & Anor v Alexander Reece Thomson LLP

Where a party succeeds overall but loses some issues, costs are determined by the litigation viewed globally. A deduction is justified only where the unsuccessful points were unreasonable and materially affected the litigation.

Indemnity costs require conduct or circumstances taking the case out of the norm. A weak but arguable claim, refusal of a Part 36 offer, or adverse factual findings will not automatically justify indemnity costs. The court should not remove proportionality and costs-budget protections by ordering assessment outside the budget after declining indemnity costs.

The judgment concerned consequential costs issues following the dismissal of the claim in the Main Judgment, [2023] EWHC 2389 (KB). The defendant’s negligence was admitted, but the claimants were found to have suffered no actionable loss.

The issues were whether the defendant’s costs should be reduced because it lost on breach, whether costs should be assessed on the indemnity basis or outside the approved costs budget, how two applications should be dealt with, and whether permission to appeal should be granted.

1. Costs generally. The defendant was the successful party. Applying CPR Part 44, the court considered the case globally. Although the defendant lost on breach, that issue did not materially increase the evidence or trial burden because the valuation dispute remained central to loss. No deduction was therefore made.
2. Indemnity costs. The applicable question was whether the claimants’ conduct or the circumstances took the case out of the norm. The negligence claim was arguable, and the lost-profits claim, though ambitious and unsuccessful, was legally permissible and not dishonest. The refusal of the offers did not itself justify indemnity costs. The court held that a reasonable claimant could have continued after the £650,000 offer, viewed without hindsight. Costs were accordingly assessed on the standard basis.
3. Costs budget. Assessment on the standard basis preserves proportionality. The court declined to remove the approved costs-budget limits by the backdoor after refusing indemnity costs. Any good reason to depart from the budget was for the costs judge under CPR 3.18.
4. Applications. The medical-evidence application was dealt with by costs in the case. The defendant was awarded the costs of the readiness application on the standard basis.
5. Permission to appeal. Permission was refused. The proposed grounds disclosed no reasonably arguable error in the scope-of-duty analysis, its application to the facts, the cost-of-funding finding, or the 50% contributory-negligence assessment. The latter two points were also obiter in light of the primary finding of no actionable loss.

The judgment records that the claim had been dismissed in the Main Judgment, [2023] EWHC 2389 (KB). This judgment determined consequential costs issues and refused permission to appeal.