COSTA V DISSOCIADID LTD & WILKINSON [2025] EWCA Civ 1475
The Court of Appeal’s decision clarifies that IPEC judges making immediate costs orders under CPR 63.26(2) must properly assess whether applications truly meet the “unreasonable behaviour” threshold, and must apportion costs when addressing only part of a multi-aspect application.
The threshold for a court to make an immediate costs order under CPR 63.26(2), rather than reserving costs to the conclusion of the trial, is a finding that a party has behaved unreasonably. [78]
An application cannot be characterised as so lacking in merit as to constitute unreasonable behaviour for the purpose of a costs order where it advances at least one key argument that is properly arguable and not devoid of merit. [63, 82]
Where a single application notice encompasses multiple distinct heads of relief, a costs order made in respect of the entire application is flawed if the court fails to adjudicate on all parts of it. Any justified costs order should be apportioned to reflect only the costs of the parts that were considered and dismissed. [63, 65, 75]
The making of an application which generates additional and unnecessary costs for the other party and requires the expenditure of scarce court resources can, in itself, be found to constitute unreasonable behaviour justifying an immediate costs order, irrespective of the underlying merits of the arguments advanced. [79]
A first instance judge’s decision on whether to make an immediate costs order under CPR 63.26(2) is a case management decision in respect of which they have a wide discretion, informed by their experience of managing proceedings in that particular court. [79]
