PT-2022-BRS-000100 - [2025] EWHC 2743 (Ch)

I have said this before in other cases, but I will repeat that the rules on costs are well known. Under the general law, costs are in the discretion of the court: Senior Courts Act 1981, section 51(1); CPR rule 44.2(1). If the court decides to make an order about costs, the general rule is that the unsuccessful party in the proceedings pays the costs of the successful party: CPR rule 44.2(2)(a). However, the court may make a different order: CPR rule 44.2(2)(b). In deciding whether to make an order, and if so what, the court will have regard to all the circumstances, including “the conduct of all the parties” and any admissible offer to settle the case (not falling under CPR Part 36) which is drawn to the court’s attention: CPR rule 44.2(4).

It is important to be clear about the meaning of “successful party” in the context of the costs rules. In Invenia Technical Computing Corporation v Hudson [2024] EWHC 1302 (Ch), ICC Judge Barber said:

“7.

To be considered the ‘successful’ party on an application, it is necessary only to succeed on the application overall; it is not necessary to succeed on each individual issue: Kastor Navigation Co Ltd & others v AXA Global Risks (UK) Ltd & Ors [2004] EWCA Civ 277 at [143]. As explained by Sir Thomas Bingham MR in William Roache v News Group Newspapers Limited [1998] EMLR 161 (CA), in determining who is the successful party,

‘The judge must look closely at the facts of the particular case before him and ask: who as a matter of substance and reality has won? Has the plaintiff won anything of value which he could not have won without fighting the action through to a finish? Has the defendant substantially denied the plaintiff the prize which the plaintiff fought the action to win?'”

As there has been no trial in this matter, there are no findings of fact to guide me in relation to the questions arising about costs. On the other hand, what I am concerned with here is not the costs of the whole litigation, but simply the costs of the application brought by the defendants in order to obtain an order that the claimant execute certain documents to give effect to the settlement terms. Nevertheless, it is clear from the written submissions, and the evidence which has been filed on both sides, that there are significant disputes of fact about what happened after I made the order of 17 July 2024. This puts the court in some difficulty, because without a trial of those questions of fact, I am reliant on such admissions as are made and such inferences as I may properly draw from the undisputed facts.

In Andrew Hicks Engineering Ltd v Jenks Associates Ltd [2023] EWHC 2031 (Ch), I reviewed the case law on exercising the jurisdiction to award costs in cases where there had been a settlement of litigation without a trial, and summarised the principles (at [78]) as follows:

“(1)

Costs are in the discretion of the court, which must be exercised judicially.

(2)

The court must have a proper basis to be able to make a costs order at all; otherwise, the proper order is no order.

(3)

That proper basis is facts which have been (i) found on the evidence, (ii) admitted or averred by a party, or (iii) properly inferred from (a) such found or admitted facts, or (b) – in some cases, at least – from the terms of the settlement agreement (if this is available to the court), though the mere fact that under the settlement the defendant pays money to the claimant is not enough.

(4)

Where there is sufficient material on which the court can ascertain which is the successful party and which the unsuccessful, the general rule applies, and the unsuccessful pays the costs of the successful unless there is good reason to decide otherwise.

(5)

Where the matter settles after an interim injunction application has been dealt with simply on the ‘balance of convenience test’, whether by imposing an injunction or accepting undertakings, there will not normally be a proper basis for making a costs order at all, let alone ascertaining the successful and unsuccessful parties, and the proper order is no order.

(6)

For this purpose, there is no distinction drawn between the case of an interim injunction obtained without notice, and one obtained (or undertakings given) after a hearing on notice.

(7)

A costs order made at first instance will not be overturned by an appellate court unless it is ‘manifestly unjust’.”