The Court of Appeal has allowed the appeal of a costs order, made following trial of preliminary issues and lead cases in 838 claims against an airline. The judgment highlights that, when assessing “success” for the purposes of CPR 44.2(2), particular care is required in complex group litigation. “Who receives a cheque” is not necessarily an appropriate indicator of success.
Hickinbottom LJ noted the following points:
- CPR 44.2(2)(a) (providing for the unsuccessful party to pay the successful party’s costs) is the “starting point”. A number of cases (including Day v Day [2006] EWCA Civ 415 and AL Barnes Ltd v Timetalk (UK) Ltd [2003] EWCA Civ 402) suggest that “who has to write the cheque” or “pay money” is the easiest or “surest indication” of success: something endorsed by Cook on Costs (LexisNexis, 2018) as providing clarity and simplicity and preventing “costs wars”. Jackson LJ, too, has cautioned against the courts’ “growing and unwelcome tendency” to depart from the usual starting point (Fox v Foundation Piling Ltd [2011] EWCA Civ 790). However, there are limits to when the “payer of the cheque” must be considered the unsuccessful party (Medway Primary Care Trust v Marcus [2011] EWCA Civ 750).
- “Considerable caution” was required when determining “success”. No party had wholly succeeded at trial and, to do justice, it was essential to appropriately reflect their respective success in the final costs order. Whipple J had viewed the fact that the claimants would receive a cheque from the second defendant (D2) as determinative, but that was “too crude an approach” in a complex group claim. The AL Barnes line of authorities concerned money claims between two parties. In a group claim, there were other material factors.
- Considering the litigation as a whole, neither party had anything close to complete success and “the honours were fairly even”, so a search for an overall “winner” might be largely fruitless. Therefore, there should be no order as to costs (Bank of Credit and Commerce International SA (In Liquidation) v Ali (No 4) (1999) 149 NLJ 1734). D2’s slight success over and above the claimants’ (if any) was offset by its conduct.
In a postscript endorsed by Davis LJ, Hickinbottom LJ was highly critical of the disproportionate costs incurred in a case that cried out for early, sensible consideration of compromise.
Case: Atlasjet Havacilik Anonim Sirketi v Kupeli and others [2018] EWCA Civ 1264 (31 May 2018).