Newman v Framewood Manor Management Co Ltd

[2012] EWCA 3717 Civ

This was a case where the costs of the successful litigation far exceeded the amounts recovered by the claimant. There was no dispute that the appellant was substantively the overall winner in the litigation, although a reduction of 5% was made to take account of the one head of claim on which she lost. A deduction was also made in respect of the costs of the appellant’s expert’s report which was made in respect of a part of the claim that was not pursued as a realistic claim. Various points were put forward on behalf of the respondent as to why there should be a different order from the usual order that costs follow the event.

A large number of points were made about conduct, including the fact that following the commencement of the proceedings the appellant did not negotiate and did not engage in proposals for compromise in a reasonable way. However Etherton LJ noted that both parties put forward dates for meetings or mediation. It was also said that the appellant did not have a reasonable approach to negotiations in terms of both making offers to and responding to offers by the respondent to settle the proceedings.

The CA thought that the respondent’s arguments missed the point. The question was not what offers, reasonable or unreasonable, were put forward by the appellant. What the respondent sought to establish in this case is that, notwithstanding that the appellant effectively succeeded in the claims, the appellant should be deprived of all or part of her costs for unreasonable conduct. Therefore it is necessary to consider the offers which the respondent said were reasonable and which the appellant failed to accept.

The CA considered these noting that the best, made on the eve of trial was effectively only that each party pay their own costs. There was no offer to pay any compensation of any kind to the appellant for the interference with her rights, which was a key part of this claim. Etherton LJ noted that:

“I do not consider in the circumstances that that offer can properly be described as anything like a “near miss”, or as being the type of offer the refusal of which discloses such unreasonable conduct on the part of the appellant as to deprive her of what would ordinarily be her right to recover costs as the successful party.”

Therefore the CA ordered that save for the expert costs, the respondent should pay 95% of the appellant’s costs.

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