Clarificatory-Value Exception to “Costs Follow the Event” on Supreme Court Appeals Between Private Parties

1. Introduction

This ruling concerns costs only, following the Supreme Court’s earlier substantive judgment dismissing the appeal ([2025] IESC 45). The proceedings were brought by Mars Capital Finance Ireland DAC (“Mars”) against Samuel Walsh (“the appellant”). Mars succeeded at every stage: Circuit Court, High Court ([2024] IEHC 648 (Barr J.)), and Supreme Court on the merits.

The central issue in this costs ruling is the proper application of s. 169(1) of the Legal Services Regulation Act 2015: while the default rule is that costs follow the event, the Court must decide whether there are special circumstances justifying departure from that default—particularly in a private inter partes dispute.

2. Summary of the Judgment

  • The Court reaffirmed the default position under s. 169(1): a wholly successful party is ordinarily entitled to costs.
  • Although Mars was entirely successful, the Court held that the appeal raised issues of real complexity and general importance, and the substantive judgment had clarificatory value beyond the parties.
  • Accordingly, the Court departed from the default rule for the Supreme Court appeal only, making no order as to the costs of the appeal to the Supreme Court.
  • The Court refused to disturb the costs orders in the Circuit Court and High Court, maintaining Mars’s costs at those levels.

3. Analysis

3.1 Precedents Cited

Little v. Chief Appeals Officer and Ors. [2024] IESC 53 (“Little”)

Little was treated as the governing modern statement of principle for exercising the costs discretion under s. 169(1). The Court applied Little in two key ways:

  • Default rule plus constrained discretion: the starting point is that costs follow the event, and departures require a justification of sufficient weight (paras. 2–3 of this ruling).
  • Private-party litigation caution: the Court acknowledged the observation (echoed from Little) that, in ordinary private disputes, the norm will not usually be displaced (para. 7 of this ruling), but held that the present appeal had features sufficient to justify a limited departure (paras. 10–11).

Godsil v. Ireland [2015] IESC 103, [2015] 4 IR 535 (“Godsil”)

Invoked through the analysis of Murray J. in Little, Godsil supplied the methodological requirement that any departure from the default rule must be grounded in circumstances “clearly identified” and exercised “on a reasoned basis, clearly explained, and … rationally connected to the facts” (para. 3). This ruling reflects that discipline: the Court identified the relevant facts (complexity, general importance, clarificatory guidance) and confined the consequence strictly to Supreme Court appeal costs (paras. 10–11).

Hegarty v. The Commissioner of An Garda Síochána [2025] IESC 41 (“Hegarty”)

Cited by Mars to reinforce that the “costs follow the event” approach remains the normal rule, with only limited and reasoned departures (para. 3). The Court did not dispute that principle; rather, it treated Hegarty as consistent with a structured discretion that can, in appropriate cases, yield an appeal-specific departure.

Smith v. Cunningham [2023] IESC 33 (“Smith”)

Mars relied on Smith as an example of the Supreme Court being slow to displace the norm in a private dispute (para. 5). The Court accepted that general caution but distinguished the present case by reference to the unusual degree of complexity and wider legal clarification (para. 10).

Connolly v. An Bord Pleanála [2018] IESC 6 (“Connolly”)

The appellant relied on Connolly to argue for a broad, non-technical “justice of the case” evaluation and to resist an overly meticulous approach (para. 6). While the Court did not expressly adopt that framing, it effectively applied a “justice” assessment by weighing the default entitlement against the systemic benefit of clarificatory guidance, resulting in a calibrated “no order” for Supreme Court appeal costs only (paras. 10–11).

Lee v. Revenue Commissioners [2021] IECA 114 (“Lee”) and Mallon v. Minister for Justice [2024] IESC 47 (“Mallon”)

The appellant relied on Lee and Mallon as illustrating that courts may depart from the default costs rule where a case clarifies uncertain law (paras. 7–8). The Supreme Court accepted the underlying logic: even in private litigation, the clarification of complex and important points may justify a departure (para. 10), while expressly declining to reclassify the dispute as public interest litigation or a test case “in the strict sense” (para. 11).

Perry v. Woodfarm Homes Ltd. [1975] IR 104 (“Perry”)

Mentioned by the appellant to underline that the respondent’s position engaged, at least arguably, reconsideration of existing authority (para. 9). Although the Court did not analyse Perry in detail in this costs ruling, its inclusion supported the appellant’s theme that the appeal implicated deeper doctrinal questions—part of the broader context the Court accepted when concluding the appeal had significant clarificatory value (para. 10).

3.2 Legal Reasoning

The Court’s reasoning proceeds in a structured sequence aligned with s. 169(1) and the modern authorities:

  1. Identify the default outcome: since Mars was entirely successful, it was prima facie entitled to its costs in all courts (paras. 1–2).
  2. Apply the governing discretion principles: departures must be justified by clearly identified circumstances of sufficient weight (paras. 2–3).
  3. Evaluate the asserted “special circumstances”: the Court accepted that the appeal raised issues of real complexity and general importance and that the judgment provides guidance beyond the immediate litigation (para. 10).
  4. Confine the departure to what is justified: crucially, the Court treated the justification as appeal-specific. It declined to label the case as public interest litigation or a strict “test case” (para. 11).
  5. Maintain lower court costs orders: the Court refused to disturb Circuit Court and High Court costs because the appellant’s arguments did not justify depriving the successful party of costs at those levels, where he had also been unsuccessful (paras. 12–13).

The operative doctrinal move is therefore narrow but significant: the Court recognized a clarificatory-value exception capable of operating within private-party litigation, yet constrained it through an appeal-level partition—“no order” in the Supreme Court, but preservation of the orthodox “costs follow the event” outcomes below.

3.3 Impact

  • Affirms the default while illustrating a principled exception: the ruling strengthens predictability by reaffirming the default rule, but confirms that a demonstrable systemic benefit (clarification of complex and important law) can justify a targeted departure.
  • Appeal-specific tailoring: future litigants should note the Court’s insistence that the departure was confined to the Supreme Court appeal. Parties will face a high threshold to revisit costs orders in lower courts absent distinct, level-specific reasons.
  • Private litigation can still generate “public” legal value: without converting such cases into public interest litigation, the Court acknowledged that inter partes disputes may produce clarificatory judgments warranting cost neutrality at the appellate level.
  • Practical litigation incentives: the ruling may modestly reduce costs risk for appellants who advance genuinely complex points of general importance, but it does not create a broad safe harbour: the Court emphasised confined discretion and the continuing norm that costs follow the event.

4. Complex Concepts Simplified

  • “Costs follow the event”: the winner normally gets their legal costs paid by the loser.
  • s. 169(1) of the 2015 Act: the statutory framework governing costs, under which the Court starts from the default rule but retains a discretion to order otherwise.
  • Discretion (in costs): a controlled judicial choice; it must be reasoned and based on identified facts, not impressionistic preference.
  • “No order as to costs”: each party bears its own costs for that stage of proceedings.
  • Inter partes litigation: ordinary private litigation between opposing parties, as distinct from public interest or representative litigation.
  • Test case / public interest litigation: litigation brought primarily to resolve a question of law for broader public benefit. Here, the Court expressly refused to reclassify the case as such, even though it accepted the judgment had broader clarificatory value.
  • Estoppel and Statute of Limitations (context): the leave ground referenced whether a settlement created an estoppel preventing reliance on limitation defences (para. 4). These were part of the substantive appeal context informing why the Court regarded the appeal as legally complex and significant.

5. Conclusion

This costs ruling develops a clear, practical principle: even where a respondent is wholly successful, the Supreme Court may make no order as to costs on appeal in a private inter partes dispute where the appeal determined issues of real complexity and general importance and produced clarificatory guidance of broader relevance. The discretion is, however, tightly policed: the Court emphasised a reasoned basis, rejected reclassification as public interest litigation, and preserved the ordinary costs outcomes in the Circuit Court and High Court. The decision thus both reinforces the default rule and clarifies the narrow circumstances in which appellate-level cost neutrality may be justified.