Sportcal Global Communications Limited & Anor v Michael John Laflin

Under Civil Procedure Rules 1998, r 44.2, the general rule that the unsuccessful party pays the successful party’s costs may be displaced where the circumstances justify a different order.

The court should assess the parties’ respective conduct, the nature of the application, the extent to which each party contributed to costs, and whether some costs arose only because of a party’s involvement in related proceedings. A party may receive only a contribution where responsibility for unnecessary or increased costs is shared.

Howard Kennedy LLP applied for an order permitting it to use confidential documents held in its former client file in related professional negligence and detailed assessment proceedings. The claimants opposed the application and sought their costs, or alternatively a contribution or no order.

The application had been addressed in an earlier judgment concerning the construction of relevant orders. By the costs hearing, the parties had agreed confidentiality arrangements, so several remaining issues were no longer necessary to determine. The issue was the appropriate costs order between the claimants and Howard Kennedy LLP.

1. Costs discretion. Howard Kennedy LLP was the successful party, so the general rule in CPR 44.2(2) applied prima facie. However, CPR 44.2(4) required consideration of all the circumstances, and this case justified a different order.
2. Reasons for departing from the general rule. The application was not ordinary party-and-party litigation. Howard Kennedy was a third party seeking to protect its position in related proceedings and sought to use confidential documents belonging to the claimants. The claimants had nevertheless contributed to increased costs through unclear drafting, an initially unconstructive approach, insufficient engagement over confidentiality arrangements, insistence on a contempt determination, and failure to engage properly with the construction and categorisation of the relevant orders.
3. Howard Kennedy could also have reduced costs by proposing draft undertakings and a draft order earlier and by explaining sooner the issues for which the documents were required. The claimants were in any event entitled to costs incurred in considering the request and to a proportion of the application costs because those costs arose from Howard Kennedy’s involvement in the related proceedings.
4. The claimants’ alternative argument concerning continued retention of documents under the Brandeaux principles was not determined. The practical resolution through a confidentiality club meant that the argument was sterile and did not affect the costs assessment.
5. The claimants were ordered to pay 15% of Howard Kennedy’s relevant application costs up to the handing down of the first judgment and its costs of the 8 November hearing. They were ordered to pay 100% of the costs of written submissions between 6 and 11 May 2022 and the permission-to-appeal application. Subject to that, there was no order for costs incurred after 28 June 2022. Costs were to be assessed if not agreed, and the claimants were to pay £10,000 on account.

The judgment records an earlier judgment in the same proceedings, [2022] EWHC 1665 (QB), which addressed the underlying application. This judgment determined the consequential costs order.