![HT-2024-000423 - [2025] EWHC 1134 (TCC)](https://backend.juristeca.com/files/emisores/logo_yJUntHA.png){kind=logo}
The Costs of the Proceedings
The Costs of the Proceedings
The Defendant seeks his costs of the proceedings to be assessed on the standard basis in the sum of £48,145; alternatively he seeks an order that the Claimant should pay 90% of his costs of the proceedings.
The Defendant submits:
Under CPR 44.2(2)(a) “the general rule is that the unsuccessful party will be ordered to pay the costs of the successful party.”
There can be no dispute that the Defendant is the successful party in these proceedings.
The Claimant brought a Part 8 on two issues: (1) the terms of the Sub-Contract, and (2) the validity of 4 invoices relied on by the Defendant as payment applications.
The Defendant succeeded on issue (1), the terms of the Sub-Contract. This was the main issue dealt with in the witness evidence and the Defendant’s submissions. It was important to the parties, given the Claimant had raised potential claims based on the terms of the Sub-Contract which it alleged applied (such as for liquidated damages).
The Defendant succeeded on issue (2) for 3 out of 4 invoices. By value, the invalid invoice represented:
19.8% of the value of the invoices (the total value of the 4 invoices was £195,857.50, invoice 1081 which the Court held to be invalid was for £38,750).
30.8% of the sum claimed (the sum claimed, following the payments made by the Claimant, was £125,650.38).
Under the general rule, the Defendant should be entitled to its costs of the proceedings.
Under CPR 44.2(2)(b), the Court may make a different order. CPR 44.2(4) sets out that in doing so “the court will have regard to all the circumstances, including –”:
“(a) the conduct of all the parties;
(b) whether a party has succeeded on part of its case, even if that party has not been wholly successful; and
(c) any admissible offer to settle made by a party which is drawn to the court’s attention, and which is not an offer to which costs consequences under Part 36 apply.”
CPR 44.2(5) provides guidance on what the “conduct of the parties” for (a) includes.
The Claimant has not made any criticisms of the Defendant’s conduct and there are no admissible offers to settle which have been drawn to the Court’s attention.
If there is to be any criticism of conduct, it would be against the Claimant, including for (a) being in breach of the Enforcement Order, (b) only issuing the Part 8 after the enforcement resulting in duplicative proceedings, (c) the Stay Application (see below), and (d) raising new arguments, such as the challenge to the contracting party, at the hearing.
The Claimant’s only argument for a different order is under (b) that it succeeded in part.
The fact that the Court found one of four invoices was invalid is not sufficient to justify departing from the general rule:
As set out above, the Defendant succeeded on the sub-contract issue.
On the invoices issue, the Claimant raised various different grounds as to why it said the invoices were invalid. All of these failed, save for one, which was in fact the Defendant’s alternative position.
In circumstances where the Claimant has failed to pay the sums due under the Enforcement Order and appears will seek to avoid paying the Defendant, an order reducing the Claimant’s liability by £38,750 is not, in practical terms, a loss to the Defendant or a success for the Claimant.
Alternatively, if the Court considers it does justify a departure from the general rule, the appropriate order is to reduce the percentage of the Defendant’s costs which the Claimant is to pay, without any countervailing order for payment of part of the Claimant’s costs. The Defendant considers that the appropriate percentage is, at most, 90%:
The Defendant succeeded on the sub-contract issue, which accounted for the majority of parties’ evidence and costs. As a rough analysis, say 65% to 70% of the costs.
The invoice issue, therefore, accounts for 30 to 35% of the costs. The invalid invoice is, by value, 20% to 30% of the invoice issue. At its highest, 30% of 35% = 10.5%. A deduction of 10% of the total costs, produces an order for the Claimant to pay 90%.
The Claimant submits:
As to the costs of the claim generally (i.e. excluding the costs associated with the stay application), the Claimant submits that: (i) the Defendant should pay one-third of the Claimant’s costs and (ii) the Claimant should pay two-thirds of the Defendant’s costs, in both cases on a standard basis.
The Claimant was successful in part in these proceedings. In the 11 December 2024 Order enforcing the adjudicator’s decision, the balance due to the Defendant was £137,412 (paragraph 6). As a result of the judgment in the Part 8 claim, that sum has been reduced to £89,739 (paragraph 3.5 of the draft Order). That is approximately a 35% reduction in the sum originally ordered (or, put another way, a £47,673 reduction). These Parties are both small businesses and a reduction of almost £50,000 is, in context, significant.
This reduction in the sum due would never have been achieved had the Part 8 Claim not been brought. The Defendant at all times maintained its entitlement to the full amount in the adjudicator’s decision and 11 December 2024 Order. Indeed, it was not until its skeleton submissions that the Defendant mooted the third invoice might be invalid, but that was only if its primary case was rejected. The bringing of the Part 8 Claim in order to determine what invoices were properly due and (in the event) to reduce the sum due by one-third was, on any view, a legitimate and reasonable course of action for the Claimant to have taken.
I accept that the Defendant was the overall winning party in these proceedings and that the starting point is therefore that the Claimant should pay the Defendant’s costs of the proceedings. However, I also accept the Claimant’s submission that the Defendant lost on a significant issue which to an extent caused the Claimant to incur costs which would not otherwise have been incurred.
In those circumstances I accept that there should be a reduction in the amount of costs otherwise payable to reflect the Claimant’s success and the Defendant’s failure on that issue. In my judgment the reduction should be 15%, so that the Defendant will receive 85% of his costs.
As I have said, the amount sought is £48,145. Whilst the Claimant again submits that the costs are excessive, I do not accept that submission. I assess the costs on a 100% basis in the sum of £48,145.
The result is that the Claimant is ordered to pay the Defendant £40,923.25 in respect of his costs of these proceedings.