Costs News

05 November 2015
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“Attritional” parties warned that they might recover no costs

Two parties who “appear determined to fight bitterly over every possible inch of ground” have been warned by a High Court judge that they may not be awarded costs whatever the outcome of their litigation – having made exactly such an order on preliminary applications which he deemed to be opportunistic.

Mr Justice Fraser told the parties that their approach to the case was the “very antithesis of cost-effective and efficient litigation”.

He was ruling on the costs of a hearing where both sides in GBM Minerals Engineering Consultants Ltd v GB Minerals Holdings Ltd[2015] EWHC 3091 (TCC) sought to amend their respective pleadings, with each opposing the other’s. “In what I consider to be exceptional circumstances, I allowed both applications to amend,” the judge said.

The main claim was for £594,000, with the defendant making a substantial counterclaim. The claimant's costs of its application to amend were £8,224 and the defendant's costs were £6,386. The defendant sought £50,693 for its application and the claimant’s costs in opposing it were £32,153 (all figures excluding VAT).

In the circumstances, Fraser J ruled that each party’s opposition to the other's application to amend their pleadings “is explained as an attempt by each to seek opportunistic advantage”. There was no good reason for the defendant to oppose the claimant's amendments, he found, while the claimant was trying to keep important issues out of the case by opposing the defendant’s amendments.

“In my judgment, both… represent examples of parties seeking ‘litigation advantage’, a phrase used (in different circumstances, concerning relief from sanction) by the Court of Appeal in paragraph [41] of Denton v TH White Ltd [2014] EWCA Civ 906. The Court of Appeal in that case made it clear that ‘the court will be more ready in the future to penalise opportunism’. Although that statement was made in the context of avoiding satellite litigation and contested applications for relief from sanction, it makes it clear that seeking opportunistic advantage will not achieve the aim of efficient conduct of litigation.

“This was in any event a pre-trial review which would have required attendance by trial counsel in any event. I consider that, in all the unique circumstances of this case, on these two applications the correct order for costs on each of the applications is no order for costs. Each party will therefore have to bear its own costs of the hearing of each application.”

Fraser J ended with “a cautionary note to the parties”. The £97,456 spent on these applications was “a sizeable amount” for relatively small developments in the case and “also a sizeable percentage of each of the costs budgets”’. Further, hearings on applications for security for costs and for specific disclosure were looming.

“This could be said to be the very antithesis of cost-effective and efficient litigation. If the parties insist on litigation of attrition, they may find (without in any way pre-judging any particular costs applications in advance) the court approaching the matter by not awarding costs to either party.”

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