HT-2020-000448 - [2024] EWHC 2025 (TCC)

Fecha: 01-Ago-2024

Analysis

Analysis

99.

Applying the general rule, TCS is the successful party, by securing an overall net paymentin its favour. This is the starting point.

100.

Is it appropriate to depart from this starting point in all the circumstances of the present case? It undoubtedly is, for the following reasons:

(1)

this is a case in which, quite unusually, over 95% of the time and cost spent by both parties was entirely unrelated to the single issue of contractual construction which drove the ultimate determination of winner/loser. Whilst not of direct relevance this point is demonstrated neatly as follows: the forensic accounting experts had prepared an agreed table of results in respect of the various outcomes from the VBSC issue, which contained a calculation error not discovered until the end of the trial. Had the error not been discovered, the sum which would have been awarded to TCS for VBSC based on the erroneous joint expert evidence would have been £1,275,638 rather than the £6,976,737 in fact awarded on the basis of the revised agreed calculations. If this had happened, applying the general principle, DBS would have been the net-winner;

(2)

this is very a long way from the position in Global Energy where the principal driver for the enormous waste of time and costs remained upon the shoulders of the dishonest losing party, irrespective of the fact that a fraction of the sums claimed were awarded. In that case, the costly process of demonstrating the falsity of Mr Gray’s account was always a necessary part of the litigation in order to recover any sums;

(3)

by contrast, if the discrete constructional VBSC issue is set to one side, virtually all the costs were incurred in the pursuit and defence (in both directions) of a classic multi-issue delay, defects and termination case between employer and contractor/supplier, in the context of an IT infrastructure project. Looking at the substance of the dispute which drove the expenditure, TCS was not the overall net-winner. Because of the £4.6m owed to DBS on account of a settlement of a claim arising out of previous delays, which it had not been paid by TCS, TCS had to succeed in recovering more than this sum in order, sensibly, to be regarded as the ‘winner’. It did not do so.

(4)

Whilst Mr Cogley relies upon the fact it was DBS who first met the short constructional VBSC point with its large, and unmeritorious, counterclaim, this is of limited relevance where TCS responded by bringing its own, largely unmeritorious, claim;

(5)

the majority of the costs, in terms of factual and witness evidence and time at trial, were undoubtedly taken up by questions of liability/causation in respect of R1 B&B. TCS failed on this completely. Its recovery in respect of R1-D was minimal and, as set out above, even though it succeeded in principle in relation to partial termination, its successful delay/termination claims remained insufficient to over-top the delay monies it accepted it owed DBS in respect of a prior period;

(6)

enormous amounts of time and effort were expended on delay analysis, in respect of which TCS’s approach led by two experts was rejected. It effectively relied, in closing, on a modified version of DBS’s own analysis to establish such little success as it enjoyed.

101.

I have concluded that it is necessary in order to do justice between the parties to make an order, in accordance with CPR 44.2(4), reflecting TCS’s ‘partial’ success, notwithstanding the fact it is the overall net-payee, the next question is what order to make.

102.

Standing back, it is clear that:

(1)

TCS won the VBSC issue, a discrete point accounting for less than 5% of the costs, and which drove its overall net success;

(2)

Although its net success was (a) minimal and (b) unrelated to the issues on which over 95% of the costs were expended, it remains the case that DBS could have protected itself against a small liability by making a Part 36 Offer, which it did not do;

(3)

In respect of the issues which drove 95% of the time and cost relating to this litigation:

(a)

Neither side can sensibly be said to have ‘won’ delay. TCS’s minimal recovery did not overtop the other delay compensation it accepted it owed. However, DBS’s delay claims for liquidated and unliquidated damages also failed.

(b)

DBS lost its counterclaim. I do not consider the somewhat ambitious approach to causation, in particular, nor the fact that as the litigation progressed defect claims were dropped as sufficient to warrant viewing DBS’s conduct as ‘out of the norm’ in this respect for the purposes of indemnity costs. DBS’s approach was no less ambitious than TCS’s to entitlement to relief fordamages and/or loss and expense on the basis of its expert analysis and in the face of the terms of Clause 7 of the Agreement.

103.

I consider that the appropriate order is that TCS is the successful party and should recover its costs. Not least in light of CPR 44.2(7), I do not consider that it is sensible to make an issue based order separating out the VBSC issue, delay or the defects counterclaim. It is preferable to reflect the very large measure by which TCS failed on matters which generated significant costs in the litigation, notwithstanding its modest net-win. There should be a very significant reduction in the costs recovered to account for the matters I have outlined above. The deduction should be 80%. TCS is to recover 20% of its costs, on the standard basis, to be assessed if not agreed.