Establishing a Nuanced Costs Assessment for Partially Successful Parties in Complex Proceedings

Introduction

The judgment in Ambasaid Ltd & Anor v MBCC Foods [Ireland] (Approved) ([2025] IEHC 152) represents a significant development in the assessment and allocation of legal costs in cases where the parties are only partially successful. Delivered by Ms. Justice Siobhán Phelan in the High Court of Ireland on March 14, 2025, the decision addresses the challenges of apportioning costs in a multi-issue dispute that extended over several days of hearings.

The case involved Ambasaid Limited and MKN Investments Limited as appellants (or plaintiffs) against MBCC Foods (Ireland) Limited. At its core, the dispute centered on various intertwined issues including the exercise of a break clause, variations on rent terms, assessment of service charges, VAT treatment, and claims pertaining to reinstatement costs. Both sides achieved wins and losses on discrete issues, rendering the costs issue especially complex. The prolonged and, at times, contentious nature of the proceedings led the Court to adopt a measured and fair approach in reducing potential litigious excesses and in aligning the costs award with the conduct and success of each party.

Summary of the Judgment

The Court’s decision on costs did not follow a straightforward “winner-takes-all” approach. Instead, the judgment emphasized that, in circumstances where neither party is entirely successful, the cost award should reflect the partial success of each party on various aspects of the case. The key findings included:

The recognition that the proceedings, which spanned 7 days of hearing, incurred unnecessary costs due to unreasonable positions adopted by both parties.
The adoption of principles developed under Order 99 of the Rules and sections 168 and 169 of the Legal Services Regulation Act, 2015, with significant reference to the Court of Appeal’s decision in Chubb European Group SE v. Health Insurance Authority.
A finding that the plaintiff, despite obtaining an award of damages on one element of the case, was not “entirely successful” overall, thereby precluding a full recovery of costs under s. 169(1) of the 2015 Act.
An order directing that each party bear 50% of the other’s costs, underpinned by the need to balance the conduct, reasonableness, and overall success in the multiple aspects of the proceedings.

Analysis

Precedents Cited

A cornerstone of the Court’s opinion was its reliance on the decision in Chubb European Group SE v. Health Insurance Authority [2020] IECA 183, [2022] 2 I.R. 734. In that case, Murray J. clarified that a party which is not entirely successful may not be entitled to the full recovery of costs. Key points from the Chubb judgment that influenced the current decision include:

Partial Success and Cost Recovery: Murray J. emphasized that while a party may not receive costs if it is not entirely successful, there exists a judicial power under s.168(2)(a) to order costs corresponding to the issues on which the party was partially successful. This principle underpinned the finding in the present case where both the plaintiff and defendant succeeded on discrete elements.
Distributive Conception of “Event”: The Court acknowledged that the term “event” in the context of cost awards should be understood in a distributive sense, implying that a case can involve multiple “events” where success or failure may vary by issue. This interpretation was essential in formulating a cost award that navigates the complexities of multi-issue litigation.

Legal Reasoning

In arriving at its decision, the Court adopted a comprehensive approach that weaved together established principles and pragmatic considerations:

Application of the 2015 Act Provisions: The judgment meticulously applied sections 168 and 169 of the Legal Services Regulation Act, 2015. The Court was explicit that a party’s entitlement to full costs under s.169(1) is confined to those who are “entirely successful.” Given the partial wins and losses by both parties, the Court carefully balanced the costs award as reflective of the fact that each party had “partially succeeded.”
Consideration of Conduct: The analysis delved into the conduct of both parties before and during the proceedings. The Court criticized both the Landlord and Tenant for adopting unreasonable strategies that prolonged litigation. For example, the Landlord’s attempt to frustrate a break clause and the Tenant's reliance on contrived arguments regarding rent payment were both noted as contributing factors to the increased costs.
Complexity and Duration of Proceedings: The judgment underscored that the complex nature of the issues—ranging from varied interpretations of rent calculations to disputes over service charges and VAT treatment—inevitably led to extended hearings and escalated costs. This recognition supported the Court’s decision to impose a balanced cost burden.
Discretion in Cost Awards: Emphasizing judicial discretion, the Court noted that even though its powers under Order 99 and associated case law were broad, the award had to be tempered by the realities of the litigation process. The discretion extended not only to weighing the merits of each party’s arguments but also to tempering the cost liability based on unreasonable and overlapping claims.

Impact

The implications of this judgment are multifaceted and potentially far-reaching for future litigation:

Guidance for Future Cost Assessments: By explicitly endorsing a distributive interpretation of “event” and by linking cost awards more precisely to the partial success on individual issues, the judgment sets a precedent for courts in future complex proceedings. Litigants can expect a more nuanced evaluation of costs where the litigation involves multiple, distinct legal and factual issues.
Encouraging Reasonable Litigation Behavior: The Court’s critical remarks regarding overly protracted proceedings and unreasonable arguments may prompt parties to adopt more streamlined litigation strategies. The judgment serves as a reminder that both pre-litigation conduct and in-court tactics are subject to scrutiny and can affect cost outcomes.
Influence on Settlement Negotiations: The decision reinforces the benefits of early and constructive settlement discussions. Parties might now give greater consideration to open offers or even Calderbank letters to mitigate the risk of extensive costs awards later in the process.

Complex Concepts Simplified

Given the intricacies of the judgment, several legal concepts merit simplification:

Entire Success vs. Partial Success: Traditionally, a winning party might expect full recovery of legal costs. However, the judgment clarifies that unless a party wins on every single issue (“entire success”), it is not automatically entitled to recover all costs. When parties achieve mixed results (“partial success”), the court can allocate costs in a manner that reflects the degree of success on various issues.
Distributive “Event” Concept: Instead of viewing a case as a single entity, the notion of multiple “events” suggests that each issue or legal argument should be considered separately for cost liability. This allows for a more equitable distribution of costs, particularly in multi-issue disputes.
Judicial Discretion in Costs: The decision highlights that judges have broad discretion when determining cost awards. This means that beyond the rigid application of statutory provisions, the behavior and strategies of the parties during litigation can significantly influence the final outcomes regarding costs.

Conclusion

In summary, the Ambasaid Ltd & Anor v MBCC Foods judgment is a seminal contribution to the jurisprudence on cost management in civil litigation. It refines and expands upon earlier precedents by establishing that:

Only parties achieving “entire success” are entitled to full costs, while those with partial victories must expect a proportionate cost award.
A distributive approach to the concept of “events” in litigation offers a fairer assessment of the merits and failures on a case-by-case basis.
Unreasonable litigation conduct and overly protracted proceedings are disfavored, thereby incentivizing parties to negotiate settlements more earnestly and adopt streamlined litigation tactics.

The judgment not only clarifies the application of the Legal Services Regulation Act, 2015 in cost orders but also sets a balanced tone for future multi-faceted disputes. Its emphasis on fairness and judicial discretion ensures that costs are allocated in a way that mirrors the substantive mix of successes and failures in a case, thereby contributing to a fairer and more efficient legal process.

Ultimately, this ruling is significant in that it underscores the need for both parties to strive for reasonableness and clarity in litigation, and it serves as a caution against protracted disputes that unnecessarily burden the legal system and the parties involved.