Mark Chassy v Left Shift IT Limited & Ors

Where a claimant succeeds against only some of several defendants, the court may make a broad-brush assessment of the proportion of costs attributable to the successful claim. A claimant is not necessarily entitled to recover all costs of proceedings involving unsuccessful claims against other defendants.

Where a CPR 36.17 offer is made jointly to several defendants and acceptance could impose liability on defendants who are not ultimately liable, it may be unjust to apply the usual costs consequences. The court must consider all the circumstances, including the structure and practical consequences of the offer.

The judgment concerned consequential orders following an earlier judgment delivered on 4 February 2025. The claimant had succeeded against the first defendant, with damages subject to agreed tax treatment, but his claims against the second and third defendants in their capacity as directors had been dismissed.

The remaining issues concerned the allocation and basis of costs, the consequences of a joint Part 36 offer, mediation, payments on account, and whether the individual defendants were liable for costs relating to the successful claim against the first defendant.

1. Allocation of the claimant’s costs. The claimant was entitled to recover costs from the first defendant, but not all costs incurred in the litigation. A broad-brush assessment was appropriate because the judge had conducted the trial and understood the issues, documents and evidence. The claimant was awarded 75% of his costs, reflecting his failure against the second and third defendants.
2. Part 36. The court applied the approach in Re: IT Protect Limited, including consideration of the reasonableness of refusing the offer and all the circumstances. Although the claimant achieved a better result than the offer, the offer had been made jointly to all defendants without distinguishing their potential liabilities. Acceptance could have exposed the individual defendants to damages and costs for claims against them on which they were not liable. In the circumstances, applying the uplifts under CPR 36.17 would be unjust.
3. Mediation. The alleged failure to mediate did not justify an indemnity costs order. The parties’ positions on liability and quantum made settlement by mediation unlikely on the evidence before the court.
4. Liability of the individual defendants. The first defendant alone was liable for the claimant’s costs relating to the successful claim. The set-off issue concerned only the first defendant, and the mediation issue could not create a costs liability for a defendant against whom the claim had failed. The second defendant was entitled to costs limited to defending the personal claims against him. The third defendant was also entitled to such costs, subject to detailed assessment.
5. Payments on account. The first defendant was ordered to pay £175,000 on account of the claimant’s costs. The second defendant was awarded £5,000 on account. No payment on account was ordered for the third defendant because the court lacked sufficient information about his costs.

Not stated in the judgment.