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Where a claimant discontinues proceedings, CPR 38.6(1) presumes the claimant must pay the defendant’s costs. The burden is on the claimant to show good reason for departing from this, and practical or financial reasons for discontinuing will not suffice. [117-121, 135]
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Interlocutory costs orders made during proceedings are not automatically reversed by discontinuance. Such orders are self-contained, dealing with costs of specific applications. A defendant ordered to pay costs during litigation (e.g., for causing adjournments) does not automatically get those payments back when the claimant discontinues. [120, 136]
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While existing orders survive, when determining costs not yet ordered, the court may reject issue-by-issue accounting where special circumstances exist—such as serious concerns the action should never have been brought or was pursued for improper purposes. The court can then take a holistic view favoring the overall successful party. [131-135]
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A party’s unreasonable litigation conduct (such as causing adjournments through inadequate applications) can justify interlocutory costs orders against that party even where they are ultimately the overall successful party. Such orders address specific misconduct rather than case merits. [136-137]
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Where contempt is proven but underlying proceedings are discontinued in suspicious circumstances, the court may award only a proportion of contempt costs to the applicant. This balances marking the seriousness of contempt against disapproval of pursuing the main action improperly. [138-141]
