Daniel McAteer v Hat & Mitre (in liquidation) & Ors

Successful parties ordinarily recover their costs. A party seeking an issue-based reduction must provide particularised and persuasive material showing that the unsuccessful issue occupied significant time or expense and warrants a deduction. A successful point does not automatically justify reducing costs, particularly where it made no difference to the result. A conduct-based reduction likewise requires sufficiently complete and specific evidence of litigation conduct justifying departure from the ordinary order. Where claimed costs appear excessive or require scrutiny, the court may order a payment on account while directing detailed assessment.

The appellant appealed against a decision of ICC Judge Jones dated 25 May 2023. Sir Anthony Mann had granted permission to appeal but dismissed the appeal. This judgment concerned consequential matters dealt with on written submissions, principally the incidence and amount of costs.

The appellant accepted, or did not materially challenge, that the liquidators were successful and should receive their costs, but sought a 33 per cent reduction. He relied on success on one issue, alleged conduct by the liquidators, and efforts to avoid litigation. The central questions were whether an issue-based or conduct-based reduction was justified and what payment on account should be ordered.

1. Disposition. The appeal remained dismissed. The liquidators were entitled to their costs without an issue-based or conduct-based deduction.
2. An issue-based costs order was not justified merely because the appellant succeeded on whether he was a contributory. The asserted significance of that issue was unsupported by particularisation or evidence. It was a relatively short statutory-construction point, involved little authority, formed only a small part of the litigation, and did not affect the ultimate result. Not every successful point warrants a reduction from the normal costs order.
3. A conduct-based reduction was also unjustified. The appellant’s submissions and incomplete historic correspondence did not provide a sufficiently reliable or complete basis for concluding that his pre-action efforts or the liquidators’ conduct warranted relieving him of part of the costs. Conduct capable of affecting costs must be demonstrated by adequate material.
4. The practice of placing a client’s unadopted submissions before the court through a solicitor’s skeleton argument was discouraged. Lawyers should adopt submissions they can properly make or omit them, maintaining the professional filter that avoids wasting court time.
5. The costs were to be assessed by a costs judge. Although the liquidators claimed £63,988 plus VAT, several elements required scrutiny, including VAT recovery, partner time spent reviewing the bundle and corresponding with the other side and client, and counsel’s £30,000 brief fee. A payment on account of £20,000 was ordered, payable within 14 days after sealing of the order.

• Chancery Appeals, High Court: Permission to appeal was granted, but the appeal was dismissed. The consequential costs judgment ordered the respondents’ costs without deduction and directed a £20,000 payment on account.
• ICC Judge Jones: Decision dated 25 May 2023, against which the appeal was brought. No citation was stated in the judgment.