Hold the champagne! Court orders costs’ reduction for unsuccessful "discrete issue"
Following a trial on liability, the Claimant succeeded in her claim against the Defendant, but was unsuccessful in relation to a discrete issue, with the Court concluding that the Claimant was entitled to recover 90 per cent of her costs from the Defendant, with the 10 per cent difference representing those costs attributable to the allegations on which she was unsuccessful.
In the case of Bonsor v Bio Collectors Limited, the High Court of England and Wales also considered the circumstances in which it is appropriate for a judge to revise a circulated draft judgment (only in exceptional circumstances should any matter of substance be corrected), but concerns principally the circumstances in which the court should make issue based orders as to costs or percentage reduced costs orders.
The Court recited the general rule that an unsuccessful party will be ordered to pay the costs of the successful party and that there needed to be a reason based on justice to depart from this. The Court articulated one such reason as being whether a discrete issue had been pleaded which added sufficiently to the length of the trial to necessitate displacing the general rule and referred to J Murphy & Sons Limited v Johnson Precast Limited, one of the leading cases on this issue.
There is no automatic rule requiring an issue-based court order if a successful party loses on one or more issues and the Court should only consider issues that are discrete and not overlapping. The Court found there was a ‘discrete issue’ and this was a case where an issue-based costs order could be made but noted that even so, it had to be practicable for the Court to disentangle the costs and award the appropriate proportion. The Court reviewed submissions made as to the time taken up by the discrete issue at trial, referred to authorities that state that this exercise is a broad brush one and applying this to the overall costs of the proceedings, arrived at the 10 per cent figure.
These issues were recently considered before the BVI Commercial Court in the case of Pacific Fertility Institutes Holding Co Ltd v Pacific Fertility Institutes (HK) Holding Co Ltd (12 March 2020). Justice Jack referred to CPR 64.6(1) which sets out the general rule that costs follow the event and notes that there is no automatic right to a reduction just because the overall winner lost on some issues. The important issue for the Judge was to what extent the costs had been increased by the losing points and he held that in this case the answer was very little. The Court therefore ordered the losing defendant to pay all of the costs of the winning plaintiff.