Court Orders Partial Costs After Defendant's Successful Application Challenging Graduate School's Claim

CCP GRADUATE SCHOOL LTD v THE SECRETARY OF STATE FOR EDUCATION [2024] EWHC 822 (KB)

Master Dagnall orders CCP Graduate School Ltd to pay £75,000 interim costs to the Secretary of State for Education, partially excluding costs related to defendant’s spreadsheet modifications, while reinforcing the principle that overall case success typically warrants full cost recovery despite minor sub-issue variations.

It seems to me much more a case that the defendant was advancing a general case and attack, and succeeded on it so as to defeat the Claim in its entirety; and the facts that the defendant failed on certain of the sub-issues were merely minor facets of an overall victory.

Citations

Henderson v Henderson [1843] 3 Hare 100 A party cannot raise in subsequent proceedings issues that could and should have been raised in earlier litigation, promoting finality in judicial decisions. Aldi Stores Ltd v WAP Group Plc [2008] 1 WLR 748 Litigants must ensure that issues are brought forward at the appropriate stage in proceedings to avoid fragmentation of litigation and unnecessary costs.

Track allocation housing disrepair CPR 46.13 settlement sum costs restriction SCCO

MRO fee markup cap 25% detailed assessment personal injury Senior Courts Costs Office

Security for costs refused CPR 25.27 very high probability success excessive estimate King's Bench

IPEC scale costs transfer Patents Court PD 30 para 9.2 costs caps Court of Appeal

Costs budget variation CPR 3.15A promptness significant development unfair prejudice Chancery Division

Costs budgeting inter partes proportionality high hourly rates AI disclosure Patents Court CPR 3E

Beneficiary personal liability section 71(3) Solicitors Act 1974 indemnity costs VAT self-supply SCCO

Summary assessment indemnity costs unless order payment on account disclosure default Chancery Division

Provisional assessment set aside CPR 3.1(7) points of dispute filing duty PD 47 para 14.3 SCCO

Fixed recoverable costs police claims CPR 26.9(10)(e) intentional tort exemption

Key Points

The general rule under CPR 44.2 is that the unsuccessful party pays the successful party’s costs, but the court retains full discretion to make a different order based on the facts and circumstances of the case. [2, 3]
In determining costs orders, the court considers whether a party succeeded on part of their case, even if not wholly successful, and evaluates conduct both before and during proceedings, including adherence to pre-action protocols and conduct in raising or contesting allegations or issues. [3, 4]
The court may award specific costs solely attributable to distinct parts of the proceedings or particular steps if it is impracticable to address them through proportionate or date-specific costs orders. [4]

Where the court orders costs subject to detailed assessment, it will typically require a reasonable interim payment on account of costs unless there is good reason otherwise, and this amount should reflect reasonable and proportionate costs under CPR 44.2(8). [4, 17]
Costs that are unreasonably incurred or disproportionate in amount will not be allowed on detailed assessment, and any doubt regarding reasonableness or proportionality is resolved in favour of the paying party. [17]

It seems to me that, subject to one point, this is a situation where the claimant has succeeded on certain sub-issues but which have not affected the ultimate determination; and it falls within the category of a usual sort of situation referred to in many cases where a party advances a number of arguments at a trial or hearing, wins overall, but fails on some sub-issues, and where those cases hold that the likely appropriate outcome is simply that the successful party obtains all their costs.

Key Findings In The Case

The Claimant was the unsuccessful party in the overall claim and, pursuant to CPR 44.2, the general rule that the unsuccessful party should pay the successful party’s costs applied. However, the Claimant succeeded on certain minor sub-issues, but these did not affect the ultimate determination. The Defendant was awarded their full costs, subject to specific exceptions. [6, 9]
The court held that the Defendant’s conduct in advancing multiple spreadsheets and modifying its sub-case, leading to some lack of clarity in evidence presented, justified a reduction in recoverable costs related specifically to those spreadsheets and associated witness statements. The Claimant was ordered to pay only half the costs incurred in their preparation. [10, 11]
The Claimant failed to comply with the court’s procedural direction to provide a statement addressing the Defendant’s proposed £75,000 interim payment on account of costs. This non-compliance was deemed relevant conduct under CPR 44.2 and influenced the court’s decision on the interim payment amount. [14, 19]

The Defendant’s total costs schedule of £169,000 raised concerns of proportionality and reasonableness, particularly the solicitor’s costs of £155,000. The court concluded that these costs warranted scrutiny during detailed assessment and resolved associated doubts in the Claimant’s favour. [15, 17]
Following a holistic evaluation under CPR 44.2(8), the court ordered an interim payment on account of costs of £75,000. This reflected a reasoned compromise, aligned with the Defendant’s earlier request for this amount and the general proportionality concerns surrounding the costs schedule. [19, 20]

It seems to me that, subject to one point specifically referred to in paragraph 132 of the transcript, this case fits within the usual category where a party wins overall but fails on some sub-issues, and the appropriate outcome is for the successful party to obtain the entirety of their costs, save for a reduction reflecting half the costs associated with certain spreadsheets and related witness statements.

Background

The case of CCP Graduate School Ltd v The Secretary of State for Education (2024 EWHC 822 (KB)) involved a claim brought by CCP Graduate School Ltd against the Secretary of State for Education. The claim was heard in the High Court of Justice, King’s Bench Division, and the judgment was delivered by Master Dagnall on January 29, 2024. The procedural history of the case is complex, involving multiple applications and hearings. The claimant sought various remedies, but the court ultimately ruled in favour of the defendant, leading to the determination of costs.

The claimant’s application for permission to appeal and to extend time was agreed by both parties to have no order as to costs, reflecting a mutual understanding that this aspect of the proceedings should not incur additional costs burdens. The main issue before the court was the determination of general costs following the defendant’s overall success in the case.

The claimant’s arguments were based on several legal grounds, but the court found that even if the claimant had succeeded on certain sub-issues, these did not affect the ultimate outcome. The defendant, as the successful party, sought costs under the Civil Procedure Rules (CPR), specifically CPR 44.2, which grants the court discretion over costs orders.

Throughout the proceedings, both parties engaged in extensive legal argumentation, with the claimant attempting to limit the costs awarded to the defendant by highlighting partial successes on sub-issues. However, the court’s decision was influenced by the defendant’s overall victory and the conduct of the parties during the proceedings.

The costs determination was further complicated by the defendant’s submission of various spreadsheets related to student funding, which led to modifications in their case. The court found that these modifications lacked clear justification and decided to exclude half the costs associated with these spreadsheets from the defendant’s recoverable costs.

The claimant’s failure to comply with a court direction regarding the provision of a statement on interim costs payment also influenced the court’s decision. This non-compliance was seen as a factor in determining the reasonableness of the interim payment amount.

The defendant submitted a detailed costs schedule totalling £169,000, comprising £14,000 in counsel’s fees and £155,000 in solicitors’ costs. The claimant’s costs schedule was noted to be structured differently, with a significant portion allocated to counsel’s fees.

The court’s approach to determining costs was guided by CPR 44.2, which emphasizes the court’s discretion in making costs orders based on the conduct of the parties and the proportionality of costs to the issues in dispute. The court ultimately ordered an interim payment of £75,000, reflecting a balance between the defendant’s costs and the need for proportionality.

Costs Issues Before the Court

The primary costs issue before the court was whether the claimant should pay the defendant’s costs in full or in part, given the claimant’s partial successes on certain sub-issues. The court had to consider the general rule under CPR 44.2(2)(a), which states that the unsuccessful party will typically pay the successful party’s costs, but also allows for exceptions based on the conduct of the parties and other circumstances.

Another significant issue was the determination of a reasonable sum for an interim payment on account of costs. The defendant sought £100,000, two-thirds of their total costs, while the claimant suggested a lower figure. The court had to assess what amount was reasonable and proportionate to the matters in issue, considering factors such as the claimant’s failure to comply with court directions and the structure of the costs schedules submitted by both parties.

The court also addressed the issue of whether certain costs, specifically those related to the defendant’s spreadsheets and witness statements, should be excluded from the recoverable costs due to a lack of clear justification for their preparation.

The Parties’ Positions

The claimant, represented by Mr. Giles, acknowledged that they were the unsuccessful party and thus should pay the defendant’s costs. However, Mr. Giles argued that the claimant had succeeded on certain sub-issues and that these should be taken into account when determining costs. He suggested that only a proportion or limited part of the defendant’s costs should be awarded, given the claimant’s partial successes.

The defendant, represented by Mr. McGurk, contended that they were the overall successful party and should therefore receive all their costs. Mr. McGurk pointed out that even if the claimant had succeeded on the direct contract argument, the defendant would still have prevailed due to other legal grounds. He argued that the claimant’s successes on sub-issues were minor and did not justify splitting costs.

The defendant also sought a payment on account of costs under CPR 44.2(8), submitting a detailed costs schedule and arguing that their costs were reasonable and proportionate to the issues in dispute.

The Court’s Decision

The court’s decision on costs was guided by CPR 44.2, which provides the court with discretion to determine whether costs are payable and in what amount. Master Dagnall noted that while the claimant had succeeded on certain sub-issues, these did not affect the ultimate outcome of the case. Therefore, the court did not consider it just and appropriate to split costs based on these partial successes.

Regarding the defendant’s spreadsheets, the court decided to exclude half the costs associated with their preparation and related witness statements, as these modifications lacked clear justification.

For the interim payment on account of costs, the court ordered £75,000, influenced by the defendant’s previous request for this amount and the claimant’s failure to comply with a court direction. The court considered this amount reasonable and proportionate, given the circumstances of the case and the need to ensure that costs were not unreasonably incurred.

The court’s approach was principled, taking into account all relevant circumstances, including the conduct of the parties and the proportionality of costs to the issues in dispute. The decision reflects a balance between ensuring that the successful party is adequately compensated for their costs and preventing unnecessary or excessive costs burdens on the unsuccessful party.

Specialist costs services across the UK

TMC Legal provides expert costs drafting, negotiaton and costs budgeting services together with representation in detailed assessment hearings. Our experienced costs lawyers and law costs draftsmen act nationwide. Contact us today.