Harrington Scott Limited v Coupe Bradbury Solicitors Limited
[2023] EWHC 294 (Ch)
Hope Capital Limited & Anor v Alexander Reece Thomson LLP
8 December 2023
[2023] EWHC 3157 (KB)
High Court
A company sued its lawyers for negligence. The lawyers admitted fault but the company didn't prove it lost money. The judge decided the lawyers should get all their legal fees paid by the company. The judge also looked at other smaller arguments and decided most of the costs would be covered by the company but not on the highest, most expensive basis.
Key Facts
- •Hope Capital Ltd and Hope Capital 2 Ltd (Claimants) sued Alexander Reece Thomson LLP (Defendant) for professional negligence.
- •Defendant admitted negligence but the Claimants suffered no actionable loss.
- •Various Part 36 and Calderbank offers were made by both parties.
- •The Claim was dismissed.
- •The court considered costs implications, including proportionate deductions and the standard/indemnity basis for costs.
- •Disputes arose regarding specific applications made before and after the trial.
- •Claimants sought permission to appeal.
Legal Principles
General rule: unsuccessful party pays successful party's costs, but court has discretion to make a different order.
CPR Part 44.2
Proportionate reduction in costs may be ordered if the winning party unreasonably pursued points it lost; global view of the case is necessary.
Triumph Controls – UK Ltd v Primus International Holding Company [2019] Costs LR 1571
In considering the reasonableness of pursuing a point, the burden is on the paying party to demonstrate unreasonableness.
Straker v Tudor Rose [2007] EWCA 368 (CA)
Indemnity costs are appropriate where the paying party's conduct is unreasonable to a high degree, or the claim was hopeless or speculative.
Excelsior Commercial and Industrial Holdings Ltd v Salisbury Hammer Aspden and Johnson [2002] EWCA (Civ) 879; Elvanite Full Circle Limited v Amec Earth and Environmental (UK) Limited [2013] EWHC 1643 (TCC); Lejonvarn v Burgess [2020] EWCA Civ 114
Refusal of a Part 36 offer does not automatically justify indemnity costs; court considers whether refusal was unreasonable.
Lejonvarn v Burgess [2020] EWCA Civ 114
If a party loses, its conduct may justify indemnity costs, freeing the winning party from its costs budget.
Denton v TH White Ltd [2014] EWCA Civ 906
Outcomes
No proportionate reduction in Defendant's costs.
Defendant's decision not to admit negligence until the close of evidence was not unreasonable, given the expert evidence and late disclosure of the Savills marketing file. The issue of breach did not significantly add to the substantive issues.
Costs to be assessed on a standard basis.
While the Claimants' pursuit of the lost profits claim was ambitious and ultimately unsuccessful due to insufficient evidence, it was not unreasonable to pursue the claim. The Claimants’ conduct did not justify indemnity costs.
Costs of the medical evidence application: costs in the case.
There was justification for the Defendant's confusion about the extent of medical evidence, but the application was sensibly abandoned after clarification.
Costs of the November application: Defendant awarded costs on a standard basis.
Claimants' failure to provide a substantive response to the Defendant's inquiries for six weeks was not constructive.
Permission to appeal refused.
The grounds of appeal were not reasonably arguable.
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