Costs News

31 January 2019
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Friston: Parties cannot use detailed assessment for “second bite” at conduct issues

A costs judge should not make wholesale reductions on assessment for conduct that could have been dealt with by the trial judge, a deputy who happens to be arguably the leading authority on costs law has said.

Deputy Master Friston (pictured) said the court “will want to ensure that dishonesty is penalised but that the party is not placed in double jeopardy”.

He was ruling in Andrews v Retro Computers Ltd [2019] EWHC B2 (Costs), an application for partial or total disallowance of the claimants' costs pursuant to rule 44.11(1)(b). This was on the basis of alleged gross misconduct before and during the proceedings.

Deputy Master Friston investigated the case law and said the comment of Lord Justice Dyson in Lahey v Pirelli Tyres Ltd [2007] EWCA Civ 91 – that “the costs judge has no power to vary the costs order that is deemed to have been made” – applied where the alleged misconduct took place during the claim itself, as opposed to during the assessment.

“Indeed, I take the view that the changes to the overriding objective in 2013 make Dyson LJ’s analysis more rather than less likely to be enduring… It would, in my view, not be in accordance with the post-2013 overriding objective to interpret or apply CPR rule 44.11(1)(b) in such a way as to allow parties to lengthen detailed assessment proceedings by allowing them to have, what in effect, are second bites at the cherry. In my view, that would be wasteful of the court’s limited resources.”

Even if he was wrong on this, the deputy master said he reached almost the same conclusion by a different route in this case in certain aspects of the application, because the court had already made an issues-based costs order that dealt with conduct issues. This gave rise to issue estoppel.

The court had to guard against the possibility of double jeopardy, Deputy Master Friston continued. “A costs judge will, of course, consider disallowing costs that have been incurred as a result of any unreasonable or improper behaviour, but even this must be done in such a way as to avoid double jeopardy.

“In my view, a costs judge would (in the absence of some special order, such an order expressly reserving certain issues to the assessment) be overstepping the mark if he or she got drawn into making wholesale reductions that would properly be the province of the judge who made the order for costs.

“Circumstances may exist, I would imagine, in which a costs order could be interpreted as being some form of special order that allowed a costs judge to exercise such powers, but this, in my view, is not even close to being such a case.

“For all these reasons, I find that even if I were to find that there had been unreasonable or improper conduct, the court’s ability to impose the types of sanction sought by the defendants is limited.”

He boiled this discussion down to “a very simple principle”, namely: “In ordinary circumstances on assessment, CPR rule 44.11(1)(b) is not to be used in such a way as to allow a paying party to adjust or negate his or her liability for costs for reasons that were or could have been addressed at the time that the costs order was made.

“Put otherwise, a costs judge is bound by terms of the costs order as properly interpreted, and there is nothing in CPR rule 44.11(1)(b) that allows a costs judge to revisit the formulation of that order.”

He then went through the nine conduct allegations made and dismissed them all, assessing the claimants' costs at £38,392 (including VAT).

Richard Wilcock (instructed by Clarion Solicitors) for the first claimant. Sean Middleton (instructed by the defendants via direct access).

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