Adrian Stuart Greville Crabb & Ors v TUI Airways Limited

When determining consequential costs orders after a multi-issue trial, the court should assess the overall extent of success rather than count issues mechanically. A percentage reduction is preferable to an issue-based detailed assessment where costs cannot be readily separated.

A payment on account should reflect the budgeted and incurred costs, subject to appropriate broad-brush deductions. In deciding whether to stay enforcement pending an appeal, the court must balance the risk of injustice to both parties, including whether enforcement may stifle the appeal and whether sums paid could be recovered. The perceived strength of the proposed appeal is relevant where the justice of the normal approach is in doubt.

The judgment determined consequential matters following a ten-day trial concerning pilots’ entitlement to permanent health insurance benefits. The claimants had substantially failed on their central claim but had succeeded on the contractual status of the PHI handbook.

The court addressed five disputed matters: costs, interest, partial success, payment on account and a stay pending the appeal process. Permission to appeal was sought on the construction of the benefits provisions and the effect of a collective bargaining agreement on clause 5.1.

1. Permission to appeal. Permission was refused. The challenges concerning cessation of PHI benefits at age 65 and variation of benefits by collective agreement had no real prospect of success. The court accepted that a novel unresolved point might justify an appeal, but left any renewal to the Court of Appeal.
2. Costs. Under Civil Procedure Rules 1998, rule 44.2(4), the court considered the claimants’ partial success. The case involved overlapping issues, evidence and disclosure. It would be inappropriate to treat the result as a mechanical scorecard or impose an issue-based detailed assessment where costs were not readily divisible. The defendant achieved substantial but not complete success, warranting recovery of 90% of its assessed costs.
3. Payment on account. Applying the conventional 90% of budgeted costs and 70% of incurred costs approach, the court included recoverable costs of preparing the budget under rule 3.15(5). It then applied the 10% partial-success reduction and a provisional one-eighth deduction for the second claimant’s separate claim. The resulting payment on account was £664,044, or £94,863 from each of the seven remaining claimants.
4. Stay. The court applied the balancing approach identified in Otkritie International Investment Management Limited v Urumov [2014] EWHC 755 (Comm), including the guidance in Hammond Suddard Solicitors v Agrichem International Holdings Ltd [2001] EWCA Civ 2065. Evidence of tax consequences and the risk of stifling an appeal justified a limited stay, notwithstanding the refusal of permission. The stay would continue only until the Court of Appeal determined permission. If permission were refused, enforcement and detailed assessment could proceed.

The judgment followed a ten-day trial and an earlier judgment in the same proceedings. Permission to appeal from that judgment was refused by the High Court. Any renewal of the application was left to the Court of Appeal.