Court of Appeal Upholds Global Approach to Costs in Dale Heathcote & Anor v Asertis Limited Appeal

Citation: [2024] EWCA Civ 242
Judgment on

Introduction

The case of Dale Heathcote & Anor v Asertis Limited presents an appeal against a costs order made by the High Court. The crux of the appeal involves discerning how costs should be apportioned between the parties when separate claims are involved. This article analyses the key topics discussed in the judgment and the legal principles applied, focusing on the Court of Appeal’s rationale in determining the appropriateness of the costs order in question.

Key Facts

The underlying dispute involved two separate claims initiated by Asertis Ltd against Mr. Heathcote and Servico Contract Upholstery Ltd (“Upholstery”): the rewards claim against Mr. Heathcote alone and the payment claim against both Mr. Heathcote and Upholstery. The High Court ruled in favor of Asertis on the payment claim but against it on the rewards claim. Notably, Mr. Heathcote had overpaid an aspect of the rewards claim pre-trial, leading to partial success for Asertis on this otherwise unsuccessful claim.

During the costs judgment, the High Court took a global approach, treating Asertis as the overall winner on costs without distinguishing between the outcomes of the two separate claims. As a result, the Court ordered that the defendants pay 75% of Asertis’ costs. Mr. Heathcote and Upholstery appealed on the basis that the costs order was incorrect in its failure to apportion costs according to the separate claims.

The appellate judgment elucidated several important legal principles concerning the adjudication of costs:

  1. Successful Party Identification: The Court mentioned the established principle that the first step in deciding on costs is to identify the ‘successful party.’ This is anchored in CPR rule 44.2 which directs the court to default to the unsuccessful party bearing the costs of the successful party, unless decided otherwise.

  2. Global Approach to Costs: The Court referred to the normally permissible strategy of assessing costs on a global basis, particularly pertinent in cases with a single claimant against a single defendant. However, it noted this approach might vary when multiple claimants or defendants with distinct claims are involved, as evidenced by the cases Flitcraft Ltd v Price [2024] EWCA Civ 136 and Sirketi v Kupeli [2018] EWCA Civ 1264.

  3. Discretionary Power and Exercise: The exercise of discretion in awarding costs is wide, but in Allen v Bloomsbury Publishing Ltd [2011] EWCA Civ 943 and Samsung Electronics Co Ltd v LG Display Co Ltd [2022] EWCA Civ 423, it was made clear that a judge should not be criticized for failing to consider a factor not put forward by the parties during the discretionary process.

  4. Judicial Responsibility: The appellate court underpinned its reasoning with the premise that a judge should not be faulted for not exercising discretion in a manner that he was not asked to execute. Parties should present all relevant considerations to inform the judge’s decision, which was notably aligned with principles in Secretary of State for Transport v Cuciurean [2022] EWCA Civ 661.

Outcomes

The Court of Appeal, after carefully considering the arguments, upheld the High Court’s decision, finding that the judge did not err in his approach to the global costs order. The judge’s discretion was exercised based on the parties’ presentation of the case: they had asked for a global consideration of costs rather than a claim-by-claim analysis. Consequently, despite the two distinct claims, the Court of Appeal found no fault with the High Court’s global method in determining costs accountability.

Conclusion

In Dale Heathcote & Anor v Asertis Limited, the Court of Appeal affirmed the broad discretion afforded to judges in cost orders and reiterated the importance of how issues are presented by the parties. It emphasized that party conduct and the strategic decisions made by counsel significantly influence the adjudication process, particularly in instances where costs are awarded. The case underscores that while identification of the ‘successful party’ is critical, where parties push for a global assessment of costs, courts are likely to adhere to this approach unless significantly flawed.

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